

Someday, somebody with a lot of Bitcoins is going to say “no.” - brokenmusic
http://chralash.wordpress.com/2013/06/26/bitcoin-vs-the-regulators-now-its-a-lot-of-posturing-but-someday-somebody-with-a-lot-of-bitcoins-is-going-to-say-no/

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colanderman
> _When an individual puts his or her foot down and says, “no,” it’s usually
> in vain, since conventional assets can be frozen, garnished, or confiscated.
> […] And when [an individual who owns a significant amount of Bitcoins says],
> “no,” then the answer is, “no,” unless the state takes the confrontation to
> the next level._

Yes, I'm sure the IRS has never had to extract wealth from people who don't
keep it in a banking account.

> _If somebody gives up their Bitcoins because they were beaten by a monkey
> wrench, then we will know that we’ve unequivocally entered a new era._

I'm… pretty sure they'd just be arrested and placed in federal prison, like
any tax evader.

~~~
pyvpx
you're equating bitcoin ownership to tax evasion? you can't pay taxes in
bitcoins. the only novelty that would come out of such a situation (person
allegedly dodged taxes, stored the 'ill gotten gains' as bitcoins) was that a
judge and/or government declares your bitcoin wallet as an asset and requires
you to forfeit it. now _that_ would be a show to watch...

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DanBC
bitcoins are taxable assets, surely?

bitcoin income is taxable income.

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patio11
"Surrender to $FEDERAL_AGENCY the sum of 100,000 bitcoins or go to jail."

"No. You can't make me."

"Wow, that's certainly a retort which our legal system does not deal with
several hundred thousand times a year."

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snitko
I think the problem here is, how would a $FEDERAL_AGENCY know how much
bitcoins does one have? The 'no' may come at a point when they ask this
question and it may come in the form of "I don't have any, now go and prove
otherwise".

~~~
patio11
In approximately the same way they'd know how much money, dope, or shares of
Toyota you have: by asking other people you did business with, counting it,
convincing you to accept it from them, or otherwise bringing the routine
practice of law enforcement to bear against you.

~~~
malandrew
What stops someone from creating a legal business entity in another country
with excellent tax laws and simply managing all business transactions for that
entity in Bitcoin. At that point the Bitcoin is not an asset of yours, but an
asset of that legal entity. Obviously, when you repatriate that money or that
entity buys something for you (because you control it), then you would have to
pay taxes on the cash value of what was purchased for you. However for every
other traditionally tax intermediate transaction, what can the government
really do?

The fact that bitcoin is extranational must open up a lot of completely legal
loopholes for avoiding taxes on everything except when you repatriate money in
one form or another.

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chc
What stops them doing this with any other currency? The point here is that
Bitcoin isn't really special.

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malandrew
The fact that you get to completely avoid the US banking system or any other
national banking system. Bitcoin can operate 100% extra-nationally.

Let's say person A registers a company in country X but live in country Y and
person B also registers a company in country X, but also lives in country Y.
Now person A can control the business of his company to do business with the
company of person B without ever triggering a taxable event for either person
A or B in country Y, until either A or B try to repatriate the money into
country Y, at which time it is taxed as income.

~~~
chc
How is that significant, though? The fact that the money isn't in any specific
national banking system doesn't change the laws that you and your business are
subject to unless you happen to find a country whose laws only care about
property that's in the banking system.

~~~
malandrew
It's significant for every type of business that transacts in services that
don't necessarily require repatriation until distribution of profits. All
purchases and sales of services occurring between two "extra-national"
corporate entities are essentially tax free. Only when profits and wages are
distributed to individuals would taxes be levied.

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jdmitch
> "If somebody gives up their Bitcoins because they were beaten by a monkey
> wrench, then we will know that we’ve unequivocally entered a new era."

Doesn't seem quite as far off as it might have before the Snowden situation :(

