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I have seen a lot of posts about taxes and zaps. So let's do some math. Gift tax exemption in the US is currently $17000 per person. That is a lot of 69 sat zaps to the same person.

Let's say they want to bring in a lawyer and argue I got economic benefit from your meme, so not a gift. 69 sats is about a penny today. I only owe taxes on the gains though. Say I'm up 30%. I owe taxes on $.0033. Let's be generous to the IRS and assume short term rates. 20% of $.0033=$.00066 in taxes owed. I don't know what an IRS enforcement action costs, do you? Probably more than that.

This is exactly what becoming ungovernable is all about. Zaps are how we force them to give up on every disposition counting as a taxable event.

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Discussion

Brick 2y ago

One could argue with the IRS that bitcoin/sats are a foreign currency and, as such, is only taxed from the date it is converted into usd by a bank.

I interpret this to mean that you could exchange bitcoin purchased years ago into usd and the only tax is the amount converted to pay your taxes in usd.

Since bitcoin only exists "online" they need to add language that describes the sovereignty of the Internet, as of now bitcoin's sovereign soil is the Internet. Which makes it a foreign currency in my mind. I'm not transacting bitcoin in the same place as I eat, live, sleep, etc. You couldn't even prove what sovereignty the nodes that facilitate your transactions follow, nodes are all over the globe.

https://www.irs.gov/individuals/international-taxpayers/foreign-currency-and-currency-exchange-rates

Sir Stacksalot 2y ago

I think the bigger argument is that when you zap someone you’re realizing the gain or loss on the sats you zapped and may owe tax on gains. I can’t imagine this mattering for sending spare change around but it’s an attack vector if Uncle Sam wants to mail you to the wall.

Kind of like if you have an 11 round magazine in CT. No one gives a shit 99.9% of the time but if they’re looking at you for something else and want to paint you as a terrorist, they’ll find that 11 round mag and charge you with a felony to stack on top of any other charges they can drum up.

With zapped sats they can hit you with tax evasion potentially.

Bill Cypher 2y ago

My point is that to collect tax on zaps requires the IRS to spend a small fortune to collect a few pennies. Without doing the math on their costs, I bet it already blows their entire budget for years just what has already passed around. If you did become a person of interest to them, zaps would return so little in taxes owed, late fees, and interest that it would still be hurting them to enforce as an addition to the existing action.

I once heard the math that it would take 10 years of 100% of the DEA budget to clean up the legal pot shops in Denver Colorado. Just one city, just one drug, just the state legal dealers.

To engage in taxing zaps would be certain failure for the IRS and make them a public laughingstock. More importantly, the idea generalizes. Large scale small payments with each being taxed is unenforceable if we all just make as many transactions as possible.