Bitcoin Community Reacts to New IRS Rules on Virtual Currency

As expected, reaction has varied widely within the crypto community with regards to the new IRS rules on virtual currency.

As expected, reaction has varied widely within the crypto community with regards to the new IRS rules on virtual currency.

At one end of the spectrum, there are those welcoming the new rules. Some are excited that they can now claim capital losses from Bitcoin to offset capital gains from elsewhere. Others like the fact that it’s considered property and not a currency, which technically puts it into the same league as other commodities like gold. Had it been declared a currency, there can be all sorts of roadblocks put in place which would hamper its growth and development.

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Many simply said that the IRS will have little ability to prove anything and didn’t seem too concerned about having to report their gains, with some saying:

“only the insane will abide by it. Just claim some reasonable amount, and print out a bunch of blockchain.info pages if they ask for proof. They won’t even be able to figure out that you handed them junk. If they call you out on it, “oops, I barely understand this stuff myself”…then go to the trouble of looking up all the previous transactions.”

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At the other end of the spectrum are those viewing the decision as the most repugnant form of sacrilege.  One reddit post was headlined: Is it about time The Bitcoin Foundation starts organizing a class action antitrust law suit against banks that close accounts for Bitcoin activity?

Another reads: We should make it our priority to convince the IRS to reconsider their position. Bitcoin should be classified as a currency, not property.

Under this view, opponents of the ruling take the opposite side of the aforementioned upbeat argument of Bitcoin being property. These opponents actually want Bitcoin to be classified as a currency in order to pave the way for regulation and greater sustainability.

When it comes to enforcing taxes, it will be interesting to see if the publicly available blockchain ledger will come to the aid- or the detriment- of the IRS to track evaders. There are no names attached to transactions, but they’re all there when it comes to piecing together a puzzle.

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