BITCOINS BEING PLUNDERED!

The IRS just Declared War on BitCoin. "Retroactively".

This announcement, that the IRS, will now be treating Bit-coin, as property, not currency, has serious legal implications, for anyone, who has used it, over the past few years.

On March 25th, 2014, the IRS, issued a unilateral edict, which instantly puts, the entire US BitCoin community, in a legal, "quandary". They are calling it, "Virtual Currency Guidance".

The new rules; designates, all crypto currencies as property, not as currency, and states, that any increase in value, between the date of acquisition, and the date of sale, counts as capital gains, and is taxable. All payments using BitCoin, are subject to the same reporting requirements, as normal payments, and BitCoin mining, is also now considered, taxable income. Oh, and by the way, these new rules, and penalties, apply retroactively.

If you run now, to grovel at their feet, they may be willing to reduce those penalties, somewhat, if you can convince them, that you had a good reason, for not reading their mind, in the future.

Their new law: Taxpayers may be subject to penalties for failure to comply with tax laws. For example, underpayments attributable to virtual currency transactions may be subject to penalties, such as accuracy-related penalties under section 6662. In addition, failure to timely or correctly report virtual currency transactions when required to do so may be subject to information reporting penalties under section 6721, and 6722. However, penalty relief may be available to taxpayers and persons required to file an information return who are able to establish that the underpayment or failure to properly file information returns is due to reasonable cause.

In one failed swoop, the U.S. government, has placed the entire U.S. BitCoin community, in a pre-carious legal position. Much of the allure of the currency lies in the fact that, it has been widely viewed as a way to bypass government restrictions, and to challenge the current monetary system. Up until this point, this currency rebellion, did not carry any risk, (outside of the obvious price volatility). Now, however, those who have bought, sold, or mined BitCoin, since 2009, have a choice. Either attempt to go back, and trace every single transaction, and corresponding price, in U.S. dollars.

"Or go rogue, and hope for the best."

Considering the libertarian leanings of the Bit-coin community, it is unlikely, that many will comply. The real question is, "whether this will push people, to keep Bit-coin gains, from touching their traditional bank accounts", or, whether they will reduce their interaction with the currency.

The decision to apply these rules retroactively, may have another unintended consequence. Given the massive undertaking, that retroactive book-keeping would entail. Many BitCoin users, are very likely to make a conscious decision, not to obey. For many, this could very well be the first time, that they defy the federal, not our suppose to be government, tax collecters. And once their status is irregular, it becomes much more likely, that they will stay irregular.

For those of you who had chosen another form of currency resistance, like (precious metals), do not be so quick to snicker, and say, 'I told you so.' These rules set precedent, may very well be applied to gold, and silver, in the near future, (and retroactively).