Wont happen. Love Ron Paul though.
Eventually bitcoin will reach a point where it functions mostly like cash and governments wont really be able to tax it on transaction…and once 2nd and 3rd layer networks are built out you wont have a need to cash out to fiat.
That will defund the fed because they have no way of taxing
Well if they can’t track transactions, how will they tax it? They just expect everyone to keep track or to at least keep track of profits? Trading and keeping track of how much you bought, when you originally bought it (most of the time multiple purchases for same coin at different prices) and then having to calculate profits, is a nightmare. My accountant seems clueless and told me to keep it and hold for a year as taxes are treated differently that way. Well, I bought Litecoin on coinbase, then transferred to Binance to only sell it for other coins. So…already have to calculate and pay taxes on profits/losses for those transactions. Its just really annoying and I know this is something keeping people away from crypto. We need something to happen that is favorable for crypto growth.
Crypto software really helps trying to get a tax report together.
I thought this was going to be a nightmare as well but it actually isn’t so bad. I have done well over 80 of these so far and what I have found is complications arise with loss of records (for any reason) or using crypto to gamble or other short term investments.
Regarding the IRS- there are businesses out here trying to win government contracts to help agencies (such as the IRS) analyze the blockchain to find tax evaders, cyber crimes, and etc. Chainanalysis is one so far. I am sure there will be others.
The exchanges (especially US based ones) are trying to change more to comply with their local governments and may give up more information on their “account holders” as time goes on, so that is just something to keep in mind.
This is an interesting problem all ways around.