The USA, IRS and Staking Now Is The Time To Stand Up

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With the recent trash coming out of the IRS and governments trying to crack down on cryptocurrency it's apparent that more then ever we need to stand up for our rights and understand law. With understanding law as well as your constitutional rights here in the USA we all know there are many "loopholes" that mega corps use every day to get out of paying taxes on millions.

One of those things we now need to be aware of is a recent push of the IRS trying to tax proof of stake tokens and how seriously unfair it would be for them to continue down this path.

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Proof Of Stake and The IRS

There is currently a lawsuit going on with one person and the government where they are trying to tax his proof of stake earnings. At the moment we know that mining rewards are considered a "business" and what is mined is considered taxable. That means for every bit that is mined you are required to pay taxes on those earnings at the time of mining/value.

With Proof of stake however the government also declared that crypto was a "property" the one benefit of that is that acquiring property was has NEVER been a taxable income. Proof of stake is the creation of new property.

Putting that into simple terms a baker when they make a cake is not taxed on that cake when it comes out of the oven. They are taxed at the point of sale of that cake being sold to someone. A transaction has to take place. When a painter paints a new artwork they are not taxed when it is completed they are taxed at the point of sale and if it sells.

When Did Taxes Start?

However we remember not all that long ago governments said crypto wasn't real currency and just some junk. Now that it's involved they continue to change their ways to take MORE money away from you and instead feed their pockets. This is the exact opposite of how the USA was founded. It wasn't until 1913 that the first federal income tax was created. Don't get me wrong I love paying taxes on some things that make sense such as infrastructure, national defense, veteran benefits and education. The things I don't want to be bothered with to manage myself.

The Massive Mess This Creates

If you thought doing your yearly taxes was difficult before now imagine having possibly hundreds of unique transactions from staked tokens that now need to be calculated and paid before you even get a penny of FIAT in your own pocket.

The entire premise of this simply makes no sense and would kill cryptocurrency.

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(Edited)

“The entire premise of this simply makes no sense and would kill cryptocurrency.”

I feel like this is more of a “the tighter you squeeze the more escape your grasp” situation. Crypto is so far ahead of government the best it can really hope for is to slow it’s decent in obsolescence.

Also, if the government wants to tax tomatoes I've grown but may rot before I sell won't they have to give me a tax credit for the negative return?

In this case one could wait until prices crash, claim the asset is no longer viable and get a write off.

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I agree. The more they push, the more the developers code. They will push to the point where the developers create stuff that will totally throw them off the path.

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Are you referring the TN couple?

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I believe there are two currently going on. But really this applies to EVERYONE who stakes including those who will be staking Ethereum here in a few months.

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I only know about the TN couple,and I’m not sure if that’s at the federal level or still in the State’s jurisdiction. It may be years before we get a ruling on something like this from the FEDs and by that time the tech will have evolved beyond their reach because it can be coded faster than they can discuss it. 🤣👊

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I agree. The government, through the IRS, is making a mess out of this tax situation. Once again they are changing traditional tax rules to fit their need - more money for the left wing liberal agenda. Point of sale taxation works in every other industry so I question their true motives for the divergence with respect to cryptocurrencies.

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So, once again the government contradicts themselves. It seems like no matter what they do the goal is to serve their own purposes. I plan on looking into this further. Right now I don't have enough holdings to worry about but I want to make sure that I cover myself when the need arises. Thanks for the heads up.


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We need a privacy layer developed that will allow people to funnel transactions in with cryptocurrency but whoever is following, i.e. IRS, has no idea where it came out. This needs to be a decentralized protocol that anyone can feed into and copy so there is no single point of failure. Then good luck seeing what anyone has.

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(Edited)

With Proof of stake however the government also declared that crypto was a "property" the one benefit of that is that acquiring property was has NEVER been a taxable income. Proof of stake is the creation of new property.

with this, it means crypto mined are not taxable. I don't see the reason why they should now contradict their principle again. this is quiet interesting

thanks for this update


Posted via proofofbrain.io

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Welcome, and any way to get their greedy hands on more of our money. Pretty sure we all pay PLENTY to them already. Everyone is always promising lower taxes and what do we always get? Higher taxes.

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So if this passes, would it apply to us at HIVE? I don't think they should be charging us for staking tokens. Crypto is different from traditional assets and they should stay away.

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Yes, since it is a DPOS system it would most likely fall under the same thing. You'd be taxed on all the new hive you generate each day for the current value and then taxed AGAIN when you sell it. That to me is totally uncalled for and greatly goes out of the bounds of our constitution.

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Very interesting. I think the IRS is trying to put all crypto in the same taxing bucket because most of their workers and some people that are involved in crypto have no idea the difference between Proof of Work and Proof of Stake. Aren't there other cryptos that don't fall into either bucket live the passive income tokens that don't get staked? The IRS will want to tax these as well. LOL


Posted via proofofbrain.io

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yep, it's total BS it's double taxing people and to me that is seriously totally unethical and removes massive freedom from citizens. LESS money needs to be going to government. I find it appalling that every election every president runs on less taxes and what do we get? Continuously taxed MORE and ever time we do we loss a little part of our freedoms. It starts to become a system of socialism just like China, Cuba, Vietnam ect. Everything so many people fought and died to protect us from and that seriously makes me sick to my stomach.

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This idea you put forth about POS being produced or created property which is not taxable is an amazing idea, and certainly would be a dream come true. 🙏

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Remember how hard the government pushed to say Crypto was a propriety. lol Now it's coming back to bite them in the butt and they are trying to do so many unethical things while still not giving people a clear path as to how to properly pay taxes on it. Don't get me wrong I am 100% behind paying taxes. But when you start to try and double tax me that's when I get pissed and so should all of you! Less money to governments is better the power needs to be restored to the people otherwise everything everyone has fought and died for freedom is being thrown out the window.

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The decisions taken by governments today on whether to encourage or discourage cryptocurrency will determine whether their country succeeds or fails over the next 50 years.

The way things are looking the USA will end up like Argentina is today and El Salvador will be like Singapore.

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I think people over think it at times, speak to a tax agent and do the best you can and do the right thing.

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This is going to be a serious clusterfuck for taxpayers and even for the IRS too. One can easily go anon and then invest in crypto opportunities such as Staking. What are they going to do about it? They don't even understand this space properly and yet pass on stupid regulations.

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@bitcoinflood
I see your point, its going to be very complicated for the normal person to do so, if there is a requirement to pay tax on POS tokens.
Namaste 🙏

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But what a stupid thing to do, are they really evaluating these measures? You can only see their desperation to avoid losing what control they still have left.

Imagine if these laws were applied to their friends, the tycoons or the big corporations, we would see many people crying and begging, this is not only unfair but also very stupid.

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