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Jeffrey Epstein was called a coward and a villain in a federal courtroom in Manhattan on Tuesday, as 16 women who said they were sexually abused by Epstein were given the chance to publicly share their fury; statements from more than a dozen others were read aloud. US District Judge…
The U.S. Internal Revenue Service (IRS) announced on July 26 that 10,000 American cryptocurrency users will receive a letter reminding them to pay taxes or amend any mistakes on past filings. At the time, IRS Commissioner Charles Rettig said U.S. taxpayers should take the warning letters “very seriously.” Sean Ryan, CTO of Node40, a platform that helps people calculate digital currency-based taxes, believes all three letters make it clear that exchanging one cryptocurrency for another is a taxable event.
IRS Believes the Tax Agency Is Ahead of the Curve When It Comes to Cryptocurrencies
When the IRS announced that it was sending 10,000 letters to American taxpayers who own or have once owned cryptocurrencies, the digital currency community seemed shocked. That said, many crypto proponents, lawyers, and tax accountants expected the action after the IRS told the public in May that updated tax guidelines concerning cryptocurrencies would be made available soon. Then, in mid-June, IRS agent Gary Alford, a man who helped take down the Silk Road marketplace, told the press that the IRS is ahead of the curve when it comes to understanding how digital currencies work and Americans who dodge capital gains won’t get away with it for long.
“We’re usually behind the curve — history is made and then we react to it. But in this case, we are ahead of the curve — We were there on ground zero, and we were waiting for the rest of the world to catch up to what we already knew,” Alford said speaking at on a panel on June 13 at the Columbus Citizens Foundation townhouse. “We already are aware that there were cases to be made, we just didn’t know if we were at the point where we can bring it for criminal prosecution.” Alford further told the crowd that people who own bitcoin usually tell people about it and if they tell their accountant that they never heard of bitcoin then it’s the IRS’ “burden to show this individual knew.”
Node40 Executive Believes the IRS Letters Clarify Exchanging One Crypto for Another Is Taxable
A little more than a week later after Alford’s speech, the IRS published a press release detailing how three types of letters would be delivered to 10,000 U.S. cryptocurrency owners. The CTO of the crypto-centric tax company Node40, Sean Ryan, inspected the letters and found one possible clarification nobody is talking about. Ryan spoke with news.Bitcoin.com in June and he said that clarified tax guidance from the IRS was “long overdue.” The announcement in regards to the new IRS letters followed our interview with Ryan so we spoke to the tax expert again.
“There is something that I haven’t seen covered in the news yet,” Ryan explained. “As we know, the IRS hasn’t answered several outstanding questions about the nuances of paying taxes on crypto. Yes, they’ve issued the 2014 memo but we all know it lacks clarity on certain points – chief among them is the like-kind rules. Section 1031 of the IRS code before the new tax law went into effect in 2018 could have been (and was by some) interpreted to allow for an exchange of one digital currency for another, like buying ETH for/with BTC — tax-deferred. There has been much debate about this among accountants and tax attorneys with valid arguments on both sides.”
But after reading Letter 6173, 6174 and 6174-A, Ryan thinks the IRS snuck a certain clarified rule within the three notices. “If you read the IRS Letters, all three contain a statement making clear that the exchange of one currency for another is taxable,” Ryan stressed. The Node40 executive added:
This might be the first time the IRS has publicly stated such guidance and it came across to me as a bit sneaky. The reality is it has major consequences for those traders who were operating under the belief that any gains could be deferred under the transfer of property rule. It seems unfair to me to call someone out for not properly paying tax while at the same time making clear a point of much deliberation.
Node40’s website is telling the American public that the company can help people who were served with the IRS letters concerning virtual currency transactions.
Tax Litigation Firms Warn Crypto Owners: ‘Seek an Attorney Before Disclosing Anything to the Government’
Following the tax agency’s press release, an alleged former IRS agent told the Reddit community on the subreddit r/cryptocurrency that the letters are just a “broad and very error-prone fishing expeditions.” Unfortunately, there was no way the r/cryptocurrency forum visitors could confirm whether the person was really an IRS agent or someone just playing a hoax. However, quite a few forum participants believed the post was legitimate and agreed when he said the letters were predatory. “It strikes me that this [cryptocurrency] letter writing campaign, in particular, is very unethical, as they’re blindly scaring thousands of people shitless who very well may have done absolutely nothing wrong,” the supposed former tax agent wrote.
All three letters have different meanings as Letter 6173 requests a signed response from the taxpayer in regards to alleged noncompliance. Letter 6174 simply asks the taxpayer to review their past returns and, if necessary, file an amendment. IRS Letter 6174-A notifies the taxpayer that there is potential misreporting concerning cryptocurrency transactions and the IRS may enforce criminal prosecution. It’s safe to say many Americans were alarmed by the IRS announcement and some people claim they have already received a letter and penalty quotes. Tax attorneys are already advertising online to help crypto owners if they received one of the three IRS letters. For instance, the law firm Frost & Associates LLC is now advertising to help those who are dealing with cryptocurrency tax audits and IRS Letter 6173, 6174, and 6174-A.
“Cryptocurrency compliance investigations may also turn into larger, criminal tax investigations,” Frost & Associates website details. “These situations can be a massive intrusion into your personal and professional life and your accountant could be compelled to tell the IRS everything you’ve told him or her because the “accountant-client privilege” does not extend to criminal investigations or state tax proceedings.” The litigation firm further warns:
If you believe you’re a target of a cryptocurrency tax investigation from the IRS, then you should immediately contact a tax attorney before disclosing anything to the government.
What do you think about the IRS sending letters to more than 10,000 American taxpayers? Let us know what you think about this subject in the comments section below.
Image credits: Shutterstock, Node40, Sean Ryan, IRS, New York Times, Pixabay.
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The post Tax Expert: IRS Letters Confirm That Trading Cryptos Is a Taxable Event appeared first on Bitcoin News.
The Kleiman v. Wright case continues this week and a slew of new evidence has been submitted to the Southern District of Florida courthouse. A supplemental affidavit stemming from the Kleiman estate’s expert witness, Dr. Matthew Edman, indicates that documents submitted to the court as evidence were “modified” and “backdated.”
Plaintiff’s Analysis of Documents Shows David Kleiman’s PGP Signature Was Created Almost a Year After He Died
A transcript of an affidavit was recently submitted to the Kleiman v. Wright (9:18-cv-80176) court case, which shows that an expert witness found many flaws within certain documents filed in the case. The billion-dollar bitcoin lawsuit is one of the most high profile court cases in the U.S. because it involves 1 million BTC and self-proclaimed ‘Bitcoin inventor’ Craig Wright. Since December 2015, the crypto community has endured Wright’s repeated claims to be Satoshi Nakamoto. However, nearly every claim and every so-called proof Wright has provided has been debunked by researchers, cryptographers, and the greater crypto community. Many of the refutations against Wright’s story accuse him of providing backdated documents and proofs that have been modified at a later date. From the very beginning of Wright’s entrance into the community, his story has been suspected of being a falsified tale or hoax. On December 9, 2015, Vice reporter Sarah Jeong detailed that the “PGP keys referenced in stories naming Craig Wright as the creator of Bitcoin were probably falsely backdated.”
Fast forward to today and Craig Wright is being sued by Ira Kleiman, the brother of the now deceased David Kleiman, for allegedly interfering with David’s bitcoin assets and intellectual property after he died. The first filing shows the value of the assets the Kleiman family thinks David was screwed out of is around $ 5.1 billion before punitive or treble damages. This week, an affidavit was submitted to the court that shows the testimony of the Kleiman estate’s witness, Dr. Matthew Edman, a cryptography expert.
As other have mentioned, Bitmessage wasn’t even publicly available until November 12th 2012. Furthermore, the only visible address is a v4 address (as it begins with 2c) and those didn’t even exist until about mid-2013.
— Peter Šurda (@PeterSurda) July 4, 2019
According to Edman’s resume submitted to the court, he has a deep knowledge of digital forensics, applied cryptography, Shamir’s Secret Sharing Scheme, and cryptocurrencies. Edman’s testimony examines an email that was submitted to the court as “Exhibit A.” Edman declares under penalty of perjury that he believes Exhibit A was likely created from an email Wright sent to himself on or about April 16, 2014. The document was then “converted to a PDF and modified to appear to have been sent from ‘Dave Kleiman’ to Uyen Nguyen on or about December 20, 2012.” The expert’s testimony further states:
I also determined that Exhibit A contained a PGP signature allegedly created by Dave Kleiman on or about March 12, 2014 – almost a year after he died.
A Trend of Modifications
Edman states that he analyzed Exhibit A previously and further analysis and forensic artifacts contained within the PDF itself bolster his opinion. The digital forensics expert said that he also examined “Exhibit F” and concluded that the document was “created by further modifying Exhibit A to make it appear as if Exhibit F is actually a separate email sent from Dave Kleiman to Uyen Nguyen.” “In my opinion, it is simply another revision to the PDF created from an email the defendant sent to himself on or about April 16, 2014,” Edman emphasized in his testimony. The witness’s affidavit declares that both Exhibit A and Exhibit F appear to be emails sent from David to Uyen Nguyen back in 2012, but “manipulations of a PDF created from an email” indicate that Wright sent it to himself in the spring of 2014. Edman noted that he understands that Exhibit A was withdrawn from the court because Wright could not “verify the date of that email exchange,” but to his knowledge Exhibit F was not withdrawn.
Edman goes on to explain that the metadata tied to the first exhibit’s PDF shows that it was created on or about April 17, 2014. The creator used the Acrobat PDF Maker 11 for Microsoft Outlook and Edman highlights that the computer’s time zone was consistent with Sydney, Australia (UTC+10) and then modified again five minutes later. Further analysis of the internal contents and structure of the document identified specific portions of the PDF were edited and revised. He further determined that Exhibit F was also comprised of modifications to the date field and revisions to the body of the document as well. Speaking on Exhibit A’s analysis Kleiman’s expert witness explained:
I identified a “TouchUp_TextEdit” marked-content point in the PDF file associated with Exhibit A which indicated that the text associated with the “From:”, “To:”, and “Date:” fields at the top of Exhibit A were edited.
The crypto community has not been kind about the latest documents and Edman’s affidavit has been shared widely across social media mocking Wright. The attorney Stephen Palley who often comments on cryptocurrency related lawsuits stated “you can’t really attack [Edman’s] credentials and the analysis looks sound.” “You have to show an alternative explanation — they should settle,” Palley added. The public will still hear from Wright’s expert witnesses which include Brett Roberson, Kevin Madura, and Nchain’s CTO Steve Shadders.
In addition to the court case drama last week, news.Bitcoin.com reported that Martti Malmi said on Twitter that he might take action against Wright for accusing him of starting the “Silk Road, Hydra and a number of other darker websites.” “Taking a closer look to the transcript, Craig Wright is accusing me and Theymos of soliciting drug trade, assassinations, terrorism and child porn — That is too much to be ignored,” Malmi told the public. Following the accusations against Malmi, the owner of Bitcointalk.org, Theymos, also refuted Wright’s court claims against him stemming from the June 28 transcript. “I was made a forum admin in 2011 after Satoshi left,” Theymos insisted.
“I never had any interaction with CSW — CSW’s whole shtick is to just lie constantly,” the forum moderator conceded. “He’s so brazen about it that some people think, ‘there must be some truth there,’ but really it’s 100% nonsense.”
What do you think about the Kleiman v. Wright lawsuit involving billions of dollars worth of bitcoin? Let us know what you think about this subject in the comments section below.
The post Expert Witness in Satoshi Case Claims Dr Wright’s Documents Were Doctored appeared first on Bitcoin News.
The man who claims to have invented Bitcoin, Craig Wright, will be appearing in court on Friday, June 28 in West Palm Beach, Florida for an evidentiary hearing. According to recently filed documents in the Kleiman v. Wright lawsuit, the defense has provided notice that Wright intends to call three witnesses during the hearing. In addition to Wright’s notice, the Kleiman estate has stated the plaintiffs will be calling a witness as well.
Craig Wright Plans to Invite Three Witnesses to Court
Craig Wright must appear in Florida court on Friday and he plans to invite three witnesses to the stand. According to case 18-CV-80176 Kleiman v. Wright filed in South Florida, Craig Wright is accused of interfering with the now deceased David Kleiman’s bitcoin assets and intellectual property. A recently filed Document 228 explains that Wright plans to call on witnesses at the evidentiary hearing held at the Paul G. Rogers Federal Building in West Palm Beach. Wright’s legal team will invite a man named Brett Roberson to “testify as an expert witness regarding digital forensics and PGP signatures.” In addition to Roberson, the defense will call Kevin Madura who will testify as an expert in regard to “cryptography, cryptocurrencies, and the blockchain.” Wright will also be calling on his coworker, Steve Shadders, the chief technology officer at Nchain. Document 228 doesn’t explain what the three witnesses will discuss, but it does highlight that Wright will be testifying as a fact witness. Even with several witnesses, Wright could easily be cross-examined as well.
The recent addition of witnesses follows the Kleiman attorney’s statements last week, which said Wright hadn’t “complied with the order to list his bitcoin.” Stephen Palley, a lawyer who comments frequently on cryptocurrency cases, explained on Twitter that calling witnesses is a puzzling move. “Calling witnesses at a contempt hearing to explain why you didn’t comply with an order you were already ordered to comply with instead of providing their testimony to object to what you were previously ordered to do — Is 5-dimensional chess only if the 5th dimension is really dumb.” Palley stated:
If you know how to do a cross-examination you don’t mind an argumentative witness and can use it to your advantage — But some witnesses can’t be dissuaded and are schooled only when they take the stand.
Kleiman Estate Plans to Provide an Expert Witness and Electronic Equipment
It’s likely Wright and his experts will discuss the alleged Tulip Trust(s) which he cannot provide certain information about because of Shamir’s Secret Sharing Algorithm. However, the plaintiffs will be providing an expert as well to the show-cause hearing and have invited Dr. Matthew J. Edman to testify. Edman will testify on subjects like “applied cryptography, Shamir’s Secret Sharing Scheme, digital forensics, and cryptocurrencies.” Moreover, he will testify on the documents Wright submitted in connection with the lawsuit. According to the Kleiman estate, Edman has previous court experience discussing similar subjects.
Wright’s coworker from Nchain, Steve Shadders, has previously told the media that he’s been in the crypto space since 2011 and met Wright in 2017. A few months ago, Calvin Ayre, one of Wright’s backers, called Shadders the “new star of Bitcoin SV as he drives the Dev team.” Shadders also wrote a blog post called “On the Satoshiness of Dr. Craig S Wright,” detailing his time working with Wright. “I have seen so much evidence that #craigissatoshi that it is a no brainer to me — It is not something I believe it is something I know as an iron-clad and indisputable fact.”
The evidentiary hearing at 9 a.m. EST could bring more of this mystery to the light of day but Wright could also be found in contempt of court and could be fined if a contempt charge materializes. He could also lose the lawsuit by violating the discovery order. The Kleiman estate not only requested to bring an expert witness to testify but they also plan to bring electronic equipment to Friday’s hearing. The Judge granted a court reporter from Magna Legal Services as well as one video camera, one laptop computer, one keyboard, one cellular phone, and four tablets for the Livenote platform.
What do you think about the ongoing Kleiman v. Wright case? Let us know what you think about this subject in the comments section below.
Images via Shutterstock, Pixabay, Google, Wiki, Pacer, and Florida case 18-CV-80176.
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The post Craig Wright Intends to Call Three Expert Witnesses to His Evidentiary Hearing appeared first on Bitcoin News.
Meghan Markle receives stern message from Queen Elizabeth after scolding staff over eggs, claims royal expertMay 3, 2019 | dailybusinessnews
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Mark Risher, Google’s director of product management, Google Identity, account security, and spam & abuse, recently urged cryptocurrency investors not to brag about their virtual currency holdings online.
Google Security Expert Cautions Traders Against Boasting Online
In a recent interview with CNBC, Google security lead, Mark Risher, cautioned crypto traders against boasting of their cryptocurrency portfolio on the internet.
Mr. Risher warned that gloating of one’s virtual riches risks attracting malicious actors such as cyber attackers, citing an uptick in attacks targeting the owners of cryptocurrency wallets. Mr. Risher asserted that many of said attacks can be traced back to a post made by the victim on a public message board – attracting the attention of scammers.
“It could just be a case of mistaken identity or guilt by association. They could be using someone who seems to be low value to pivot toward somebody considered a higher value target, like somebody political in nature. Or maybe they saw that you were discussing Bitcoin on a public message board,” he said.
Increasing Sophistication of Online Scammers
Mr. Risher also warned that social media has increased the sophistication with which many attackers target their victims through allowing scammers to conduct detailed research into the individuals that they target. “You might think of this generic ‘Dear Sir or Madam, I am contacting you to ask you for a favor,’ but the truth is many of these attackers have done some serious research on their victims,” Mr. Risher said.
Earlier this year, it was reported that cryptocurrency Youtubers were increasingly becoming targeted by malicious actors. Peter Saddington, the host of the Youtube channel ‘Decentralized TV’, recounted being hacked in late 2017, stating: “You have to be very careful about that stuff as a Youtuber. In my early days of Youtube, I used to show my trades. I learned that was not a good idea.”
Mr. Saddington asserts that many Youtubers have “learn[t] the hard way,” stating “We no longer have a bank that we can whine to and say, ‘bank, my mohackney was stolen, give it back to me.’ No. We’re not in that economy anymore. If you lost your Bitcoin that is 100 percent your fault.”
What is your response to Mr. Risher’s recommendations? Share your thoughts in the comments section below!
Images courtesy of Shutterstock
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