News Does the IRS Fear Bitcoin? An op-ed in the New York Times theorizes that the IRS bitcoin mining payout schedule for irs Bitcoin due to tax evasion.
What actions could the IRS take to combat this? They can garnish wages, levy fines, put liens on personal property, and even send you to jail for failing to pay the appropriate taxes. Which is why it’s interesting to see an op-ed in the New York Times say that the IRS is afraid of Bitcoin. The op-ed was written by Richard Holden and Anup Malani. Holden is a professor of economics at the University of South Wales while Malani is a law professor at the University of Chicago.
A pretty significant amount of money goes untaxed each year in the US due to the underground economy that is currently cash-based. 500 billion in revenue is lost each year due to unreported wages. What the Internal Revenue Service fears is that Bitcoin and other cryptocurrencies could become much more mainstream and used on a daily basis. Currently, it is somewhat of a hassle for people to exclusively use cash as one has to withdraw it, carry it on their person, and payments have to be made face-to-face. This tax evasion could be even worse if someone shuttles around their cryptocurrency through various addresses. Such a scenario and the purported anonymity that cryptocurrency provides is enough to give the taxman an upset stomach.