GIFA Token (GIFX) is the world's fastest-growing digital currency and exchange. The platform represents an easy, secure, and fast way fo...
GIFA Token (GIFX) is the world's fastest-growing digital currency and exchange. The platform represents an easy, secure, and fast way for new users to buy, sell and hold various digital currencies plus a free digital wallet.
GIFX exchange supports all sorts of users: Traders, and investors in over 200 countries, including the United States, Germany, Switzerland, Turkey, China, Eastern Europe, Mexico, Argentina, Russia, Africa, and MENA. Customers in the afore-mentioned countries and regions can purchase GIFA Token by debit card, bank transfer, deposit, PayPal and more. Get up to 30% instant discount when you signup on www.gifatoken.com.
The United States is a mega-hub for cryptocurrency trading and adoption. As the US boasts some of the wealthiest and most technologically advanced democracies on Earth, it's no wonder that so many people are going wild for cryptocurrency.
Related news
Among GIFA Token's confidant adopters are in the countries like Ukraine, Russia, Turkey, TRNC, Italy, Romania, Netherlands, Nigeria, Zimbabwe, DRCongo, and the US. Those for the first time hearing about GIFA Token: The exchange is based in Northern Cyprus, and the trading platform welcoming all users across the two hemispheres, sign up with GIFX exchange only takes a few minutes. Please watch the YouTube video for further guidelines.
Cryptocurrency development in the US
 |
| Map showing Mainland USA with a superimposed national flag. / Shutterstock |
Recently, in an effort to close the “tax gap,” the United States Treasury Department issued new rules for reporting large cryptocurrency transactions to the IRS. The American Families Plan Tax Compliance Agenda was released on May 20, one day after the Chinese government reissued usual restrictions on crypto transactions and mining activities in the country. Some crypto enthusiasts are claiming that the move is an effort initiated by President Joe Biden’s administration to make his own crackdown on cryptocurrency in the US.
Why no single country won banning Cryptocurrency?
A good explanation for such question is that the cryptocurrency is not physical but rather a virtual currency that lives in cloud storage and is operated by online connected software that runs continuously in global networks across thousands of redundant ‘nodes.’ This type of digital currency is usually decentralized, with no leadership role or central node that can be approached in order to enforce any sort of ‘ban.’ A government might just as well try to ban the rising of the sun, of which you can't able to stop it or control over it!
The American Families tax plan became effective this month that would require transactions over $10,000 in cryptocurrency to be reported to the IRS. This means all trading and exchanges must report cash payments of more than $10,000. According, to the new provisions, cryptocurrency is considered as “property” subject to federal income tax consideration and again is treated as a capital asset. Therefore one has to continually record any applicable capital gains or loss, even for small transactions, says Joe Carlasare, an Adv. attorney, and the co-chair of the blockchain FinTech group.
“I do not view the requested proposal to report transfers of at least $10,000 of cryptocurrency to the IRS as a move to slow down the market,” ''My view is that the IRS is trying to capture the whole revenue.” He also said if the government wanted to shut down or slow down the market, “the most draconian steps they could take would be to shut down domestic cryptocurrency exchanges.” However, such a move will bring many critics against Biden's administration. Over 80% of US citizens all love cryptocurrency and the majority of them have already tested the good side of it.
“By controlling the entrance and exit ramps to exchange local currencies for crypto, it would make it difficult for citizens to buy crypto. However, this is not the approach that most governments are taking. Most governments permit exchanges to operate so long as 'Know Your Customer' (KYC) procedures function to assess customer risk and there is compliance with Anti-Money Laundering (AML) laws,” Carlasare asserted.
Carlasare said we should pay attention to how governments and entities outside the United States are regulating or adopting cryptocurrencies, particularly China and the European Union. The Chinese government recently restated its regulations on cryptocurrency, banning businesses from crypto transactions. A Chinese citizen can still buy or own digital currency without facing any problem.
“This is a developing industry and there remains legal uncertainty in the financial space. Don't forget that cryptocurrencies are here to stay, but we should fully expect that regulators will continue to provide appropriate guidance as this new asset class matures,” Carlasare added.
I rather own cryptocurrency than bonds
The billionaire investor Ray Dalio stated that bitcoin's greatest risk is its success - if it becomes a larger asset class and poses a real threat to others, like bonds, that could prompt a regulatory crackdown that could hinder the whole cryptocurrency market. Right now bitcoin isn't a true threat because it's still small relative to other assets, he said. The total value of bitcoin is slightly over $1 trillion, while the value of US bonds is about $23 trillion.
''I'd rather have bitcoin than the bond.''
Dalio said the US government could ban bitcoin altogether if it became too successful or powerful against the dollar. He described bitcoin as "one hell of an invention" and said bitcoin and other cryptos could become an alternative, gold-like store of value. The billionaire investor has been bearish on bonds for quite some time, saying the financial instruments pay less than inflation.
The IRS is aggressively pursuing taxes on cryptos' transactions
Another regulative tool the IRS now using is the “John Doe summons.” as an initiative to hunt unreported taxes and large amounts of cryptocurrency transactions. In the past, the IRS used John Doe summonses to identify taxpayers who had not paid their tax obligations by serving them on credit card companies such as American Express, MasterCard, and Visa, as well as payment services such as PayPal.
Now, the IRS is applying this tool to cryptocurrency exchanges. While a typical summons is issued when the IRS knows the name of the specific taxpayer, the IRS uses a John Doe summons to obtain the names of all taxpayers in a certain economic group. For example, a 2008 John Doe summons was a key step in the IRS finding U.S. Taxpayers with accounts in Swiss banks, a type of offshore business banking.
A John Doe summons is not only a potential source of concern for younger taxpayers who may have cryptocurrency tax obligations, but it can also impose substantial burdens on personal earnings and cryptocurrency exchange or other parts involved.
A John Doe summons must be approved by a federal district court judge, and on April 1, 2021, a federal court in the District of Massachusetts for the first time entered an order authorizing the IRS to serve a John Doe summons on Circle Internet Financial Inc., a digital currency exchange headquartered in Boston.
The government sought information about U.S. taxpayers who conducted at least the equivalent of $20,000 in transactions in cryptocurrency during the years 2016 to 2020. The IRS requested that Circle produce records identifying the names of U.S. taxpayers, along with other documents relating to their cryptocurrency transactions.
The second scenario was IRS directing authority to issue John Doe summonses against Kraken, a California cryptocurrency exchange. Once the government requested about U.S. taxpayers who conducted at least the equivalent of $20,000 in transactions in cryptocurrency during the years 2016 to 2020. The domestic exchange will do nothing but produce all records.
The proposed summons seeks broad categories of information such as “complete user preferences (the altcoins he/she trading often),” “any other records of Know-Your-Customer due diligence,” (KYC), and “all correspondence between Kraken and the user or any third party with access to the account pertaining to the account,” among other similarly expansive requests.
As these two cases show, the IRS is seeking broad information related to those engaged in cryptocurrency transactions, and third-party record keepers (exchanges) will face onerous requirements to produce such information. “Tools like the John Doe summons authorized [in the Circle case] send the clear message to U.S. Taxpayers that the IRS is working to ensure that they are fully compliant in their use of virtual currency,” said IRS Commissioner Chuck Rettig. “The John Doe summons is a step to enable the IRS to uncover those who are failing to properly report their virtual currency transactions. We will enforce the law where we find systemic non-compliance or fraud.”
The broad information-gathering the IRS is conducting as part of its cryptocurrency enforcement effort will also likely lead to scrutiny of both the broader community of businesses and people that may not be primarily engaged in cryptocurrency transactions, but who provide or receive services for cryptocurrency and related reporting obligations. Like earlier IRS enforcement initiatives, this can lead to a focus on reporting and withholding obligations. Some of the issues that have arisen as a result of earlier similar IRS enforcement initiatives have included:
- Withholding on payments to foreign persons. Generally, a foreign person is subject to a U.S. tax of 30% on its U.S. source income, subject to certain exceptions or reductions.
- Withholding refers to rules that require 30% withholding on a payment of U.S. source income and the filing of required forms.
- Payments in cryptocurrency are not exempt from these requirements, but its relative novelty has led some to overlook compliance issues.
- Foreign account and transaction reporting. U.S. citizens and residents who hold more than $10,000 in foreign accounts are required to report the accounts on Form 114, Report of Foreign Bank and Financial Accounts (FBAR). Currently, FinCEN has stated that a foreign account holding virtual currency is not reportable on the FBAR (unless it holds reportable assets besides virtual currency), but FinCEN has stated an intention to amend those regulations to require reporting of cryptocurrency.
- Separately, those with certain foreign financial assets in excess of $50,000 must also report foreign accounts (and certain other foreign financial asset information) on Form 8938, Statement of Specified Foreign Financial Assets.
- U.S. persons and residents should be aware that (1) there is potential ambiguity in these rules as applied to cryptocurrency, (2) the government has announced an intent to change the rules, (3) there has been continuing speculation about IRS positions regarding reporting obligations, and (4) reporting for foreign assets can be complicated and expose U.S. persons and residents to substantial penalties.
With tax season underway in the U.S., those that are transacting in cryptocurrency, whether as a trading or merely to pay for goods or services, should obtain appropriate tax advice. As a general rule, disclosing one’s transactions to a qualified tax advisor and following legitimate advice can protect taxpayers from penalties (but not the underlying tax liabilities). The IRS has demonstrated it is taking steps to gather substantial information and will be pursuing those that do not comply with the rules.
Investment in the offshore haven
GIFX exchange is proving a safe haven for all your finances include digital assets with very low-interest rates. Foreign investors especially from highly ratified countries can utilize this opportunity provided in a grey area that prioritizes maximum financial secrecy of the clients. Take a note that none of your information will be made public to a third party. Rest assured that your digital assets and investment are completely secured.
This article does not necessarily reflect the opinion of Satoshiz.org and affiliates, the article is written by experienced bloggers, and academics discussing the developments and current issues in US taxation and fintech affairs.