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Am I the only one who sees this as a move on Ohio's part to get its residents to "accidentally" disclose their Bitcoin assets by making a payment from their "hidden" stash invested in Bitcoins? You pay your taxes from your Bitcoin wallet? Oh how nice! Now here is your state subpoena to disclose the FULL value of your (possibly non-US or offline) Bitcoin wallet. I have a friend who lives in Portland (Maine) and used his BTC to pay some city fine. A month later got a formal order from the state's revenue collection service to file a non-US asset disclosure form and report ALL of his BTC in possession. And mind you, he is NOT a US citizen or even permanent resident. He is in the US on a tourist visa. A US citizen/resident could probably face criminal charges after disclosing he/she has Bitcoin stash they failed to previously report.



> he is NOT a US citizen or even permanent resident

Not paying taxes on a publicly-ledgered asset with a well-accepted monetary value that you then disclose to a government is the height of stupidity. If your friend’s home country has any tax treaties with the United States, I’d encourage him to get his paperwork in order with them.


As far as I know, he owes almost no taxes. He is a resident of Monaco and it has no taxes on its residents AFAIK. The state of Maine actually invoked FATCA compliance as a legal backing for filing the form. I find that strange as FATCA is a federal law and if anybody would be enforcing it would be the IRS, but of course he is not going to argue with Main so he just ignored the form and left a month later. Probably not very smart on his part for ignoring it but he said there is no way he going to report all of his BTC assets to Uncle Sam simply for being a tourist visitor. However, for a US citizen/resident it could very well end up pretty badly as reporting assets that had not been taxed so far will get you state and federal tax (with interest) AND probably some fines. Not reporting it is even worse because the state (and IRS) now knows you have a BTC wallet and will assume you are hiding assets in it, which is both a state and federal felony. Anyways, it would be interesting to watch how this plays out.


I'm not sure why this would be a goal. There is nothing illegal about holding something valueable. It is only taxable events, such as selling your bitcoin, that require disclosure to the government (so that they can tax you, obviously).


There's nothing illegal about holding it, but due to tax law ambiguities and changes, almost every person holding it is guilty of some tax evasion/fraud. As governments get more and more desperate for revenue to back their spending (this is especially true of states who can't print money like the Fed can), I certainly don't want to be on their list of "likely criminals" they can come after.


Holding Bitcoin is no different, legally, than holding bars of gold.

And yet many people hold gold, or other precious, non USD materials, but nobody freaks out about their about tax fraud risks.

If the government starts coming after everyone's non USD commodity holdings (which, to be fair, isn't entirely unprecedented. Owning gold was illegal at one point), then we have much bigger problems than just as it applies to the comparatively tiny crypto market.




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