Tuesday, June 18, 2013

The Tax Man Cometh—For Your Bitcoins

Nobody knows how much tax revenue is lost to virtual-currency transactions—not even the IRS. But when has that stopped anybody?

  

If I write a book and sell a few million dozen copies in my local bookshop, I owe the government a cut of that income in taxes. The rules on what I fork over, and how, are pretty clear. But what if I write a book and decide to sell it online in return for bitcoins—how much do I owe the tax man then?

No one has any idea. Even though we know there are some 11 million bitcoins in circulation worldwide, nobody's sure how many users are American; so it's impossible to calculate how much money Washington is losing on transactions conducted using the anonymous digital tender. In a report out Monday, the Government Accountability Office concludes that if only bitcoin users were better informed, they'd start paying up.

For the rest of the story: http://www.nationaljournal.com/tech/the-tax-man-cometh-for-your-bitcoins-20130618

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