CNBC reported on July 26th that the Internal Revenue Service is sending letters to 10,000 digital currency holders who potentially failed to pay the necessary taxes or improperly reported taxes on their digital assets last year. In some cases, the IRS says taxpayers could be subject to criminal prosecution. All of letters will be sent by the end of August.
I am shocked, shocked to discover that some people may be trying to avoid paying taxes by hiding cryptocurrency profits!
"Taxpayers should take these letters very seriously by reviewing their tax filings and when appropriate, amend past returns and pay back taxes, interest and penalties," says IRS Commissioner Chuck Rettig, who added, "The IRS is expanding our efforts involving virtual currency, including increased use of data analytics."
Last year, popular trading platform Coinbase alerted 13,000 customers that it was complying with a court order to provide the IRS with information on accounts worth at least $20,000 from the years 2013 to 2015. The IRS did not say whether its mailing list was a result of the Coinbase disclosures.
Based on guidance issued in 2014, the IRS treats all virtual currencies — including bitcoin, Ethereum and XRP — as property under U.S. tax law. That means that like real estate, the sale or exchange of tokens for other goods is a taxable event. And similar to stockholders, digital currency holders are required to report capital gains and losses from cryptocurrency trades.
Most trades count as short-term capital gains, which can be taxed at as high as 39% depending on income bracket. Those who hold bitcoin for more than a year and then sell it, however, are only liable for a long-term capital gains tax, which is levied at a significantly lower rate of 15% to 23.8%.
If you own bitcoin or other cryptocurrencies, you might want to check your mailbox.
It is frightening, to those who give a damn about privacy, that both Attorney General Barr and FBI Director Christopher Wray have again taken up the call demanding that technologies provide encryption back doors.
The Register carried a post about Wray and ZDNet carried a post about Barr. The Register, being British, is fun to read. Their title was "Backdoors won't weaken your encryption, wails FBI boss. And he's right. They won't – they'll fscking (sic) torpedo it." And their (cough, cough) infinite respect for Wray was indicated in their subhead: "Give it a Wray, give it a Wray, give it a Wray now: Big Chris steps in to defend blowing a hole in personal crypto."
There's certainly no way you can mistake the position of The Register on this issue!
Wray sings the old songs lamenting that criminals are "going dark" and that the government can't do its job without backdoors. Whatever did they do before computers and smartphones?
He also says the government isn't trying to weaken cybersecurity. As we all know, that is pure BS. Encryption backdoors invariably get out and then not only does the government have access to our data (and we all know how much we trust the government), but so do the bad guys.
Barr talked about the "huge costs on society" of "warrant-proof encryption." But what about the privacy costs of American citizens? The government has consistently earned the distrust of its citizens. Moreover, anything that weakens encryption can and will be exploited by the very criminals the government claims it is going after.
Barr also talked about proactive surveillance to prevent crime. That's just great – now the government is going to decide who might commit a crime and conduct surveillance?
Apple, Microsoft and Google have all stood fast against this foolishness. Let's hope they continue to do so!
Hey all- Jack Wylder here. With Larry hard at work relocating into the new Stronghold of Yard Moose Mountain, he hasn’t had time to blog much lately so I wanted to take this opportunity to share a post of his from the Book of Faces. Enjoy!
It is time once again to explain my Three Cooters Theory of Internet Discourse.
-Three guys named Cooter get very upset about X and post about it on Twitter. (1 is actually a person, and 2 of them are probably troll accounts)
-30 people actually see the Cooter’s outrage first hand, and write tweets condemning the Cooters for being offended about X.
-300 people immediately share these condemnation posts to signal their virtue.
-3.000 click bait news articles are written about this terrible scourge of hatemongery that is sweeping the internet.
-30,000 trolls (like Cooter69, CooterPowerForever, and DarkCooterAngel) pretend to also really hate X, because it gets a rise out of people.
-300,000 memes are created mocking both sides for being butthurt snowflakes.
– 3,000,000 people claim victim status because they have been so irreparably psychologically damaged by the legions of Cooter. A special federal task force is formed to combat Cooter related hate crimes and the UN General Assembly issues a proclamation blaming it all on Israel.
-30,000,000 Americans who actually have an opinion about X are all like lol wut?
X may be things like “Black Storm Trooper” or “Starbucks Holiday” cups. (we’ve had a new one about every other week for the last four years) but whatever it is, Cooter got very upset, and though he grew up eating lead paint chips, his angry tweet represents you and the half of the country that nominally agrees with you about topic X. His incoherent outrage has been assigned to you, and the half of the country that disagrees with you is going to be sure to post about how you’re all really stupid, so that all their friends will know how virtuous they are.
This week it is because Alexendria Ocasio-Cortez or whatever her name is–I don’t care enough to go look up how its spelled–had a video of her dancing while she was in college posted to the internet.
She put up a tweet about how conservatives are outraged and offended by her dancing (I saw it because the cool Navy SEAL congressman with the eye patch laughed at it). When I went onto Facebook I saw lots and lots of memes about how conservatives are all the dad from Footloose, and want to ban sinful dancing because its from the devil, and we want women to wear burkas.
(seriously, life is way nicer now that I’m trying to limit myself to 30 minutes a day in this cesspool).
Except as I scroll through my feed, which has lots of knuckle dragging, right wingers, clinging to their guns and bibles, the most damning things I could find were people saying stuff like “She’s pretty cute for a deranged socialist” and jokes about the hot/crazy matrix. Most sane and regular people don’t give a shit how she dances, they just don’t want to pay 70% of their income in federal taxes.
And of the many many many threads about this latest super controversial subject, I saw ONE reliable person saying that they witnessed firsthand an actual cranky Cooter (who is a real person and not a troll) outraging about her dancing, and it was on some small town board nobody outside of Somnambulist County Iowa has ever heard of.
We live in a country with a third of a billion people in it. This shit is tiresome and people are gullible. Next week will be some other hot button topic that three Cooters (who magically represent half of the country) get upset about.
Just say no to three guys named Cooter.
EDIT: – this is Larry again. Jack found this post that I wrote a year ago. But if you check current events it is still going on. I think right now the Three Cooters who magically represent half of America are very upset about black mermaids or something. It’ll be something new next week.
DURANGO — Narrow Gauge Day is a hallowed occasion.
It’s the annual kick off for the beloved Durango & Silverton Narrow Gauge Railroad, the historic coal-fired locomotive that draws people from all over the world. The community gathers on a May day to grill hot dogs and hobnob with neighbors as the Bar D Wranglers serenade the crowd with classic cowboy music.
For Kristi Nelson, who played with toy trains in her living room as a little girl and who worked for the railroad for 15 years, the season’s start means it’s time to celebrate.
But not this year.
Nelson is one of more than two dozen area residents and businesses suing the railroad and its owner for causing last summer’s 416 fire, the sixth-largest wildfire in Colorado history that triggered thousands of evacuations, destroyed 54,000 acres and caused millions of dollars in economic damage.
The lawsuit, filed in September, accuses the Durango & Silverton of carelessly running its vintage train despite extreme drought conditions. A federal investigation concluded that hot cinders from the train’s smokestack sparked the fire, and the U.S. Attorney’s Office on Tuesday filed another lawsuit to recoup the more than $25 million spent fighting the wildfire.
For Durango, which owes its 140-year-old existence to the train, the locomotive is the town’s identity. And it’s the region’s economic lifeblood, responsible for $250 million every year in the local economy.
The lawsuit has created two camps in town: Those who believe the train should be held responsible for the fire and those who believe its owners should be forgiven because of all the good the locomotive has brought to the region.
Some, such as Nelson, avoid community events. Friendships have been severed. Others avoid speaking openly about their views for fear of retribution. Even the local attorney who brought the lawsuit agonized over whether to follow through.
The train’s staunchest defenders can’t understand why anyone would go after the town’s economic engine.
“They’re really foolish and short-sighted,” said Duane Smith, a longtime Durango historian. “For heaven’s sake, this is not the right solution.”
As the community rallied behind its local treasure on May 3 for the start of a new season, Nelson avoided the festivities for the first time in 20 years.
“It’s with a heavy heart that I entered the lawsuit,” Nelson said. “It’s not my intention to hurt the railroad.”
On the morning of June 1, 2018, two residents said they saw a fire start moments after the train chugged up the drought-stricken Shalona Hill, just north of Durango.
The trains, which are nearly 100 years old, commonly shoot burning cinders and, particularly under dry conditions, “pose an extremely high risk of fire,” federal prosecutors wrote. The train ignited multiple fires in the month leading up to the 416 fire, the federal lawsuit said.
What started as a small brush fire quickly spread into a massive wildfire. The flames burned more than 54,000 acres across southwestern Colorado, shutting down the San Juan National Forest for the first time in its 113-year history. Firefighters fully contained the blaze by the end of July.
As the fire raged, the railroad suspended service for 41 days. While trains sat idly in the depot, local businesses struggled. The Durango Chamber of Commerce estimated the town’s economy took a $33 million hit in June alone.
A year later, Al Harper, the railroad’s owner, said he’s making changes to ensure the trains run safely this summer.
Harper spoke softly, projecting an aura of calm even as the U.S. Attorney’s Office was preparing to sue for millions of dollars in damages and the local lawsuit was winding its way through La Plata County court.
Some changes already are taking shape. The train company is spending $6 million on improvements, Harper said, including the purchase of two diesel-powered trains that he hopes will be ready by September. Diesel locomotives can run in any weather and pose a lower fire risk.
While he had been considering adding diesel trains for years, “last year encouraged us to do it more quickly,” Harper said.
Other additions include $1 million for new tracks to accommodate the diesel trains and another $1 million for track improvements, Harper said. The railroad operator also is converting a 60-year-old oil-burning engine to add to its fleet.
The above-average snowfall this winter has eased some anxiety about the 2019 season’s fire conditions, but Harper said they will take no chances. On days with heightened risk, the railroad will park its coal trains and run the diesel engines. Helicopters carrying water likely will fly every day during peak season, Harper said.
“We’re probably the most fire conscious of any organization in the state of Colorado,” Harper said.
After a slow start due to this spring’s late snowfall, Harper said the railroad is within 2 percent of its normal passenger rate.
Durango’s “Golden Goose”
To understand Durango is to understand the railroad’s legacy. And it helps explain why so many people — even those who were significantly affected by 2018’s fire — remain avid train defenders.
“Without the train, Durango wouldn’t be here,” Smith, the retired history professor who taught at Fort Lewis College in Durango for 40 years, said.
The Denver & Rio Grande Railroad founded Durango in 1880 to service the nearby San Juan mining district, part of the fevered gold rush era which attracted eager investors to the region. In 1882, tracks to Silverton were completed, and the train started hauling freight and passengers.
After mining began to falter in the 1930s, the train transitioned into a full-time tourist attraction, Smith said. And its majestic tour through the San Juan Mountains became the primary reason for people to visit Durango.
“We’re a pretty isolated spot down here,” Smith said. “So without that train, Durango would just be an isolated college town.”
The train impacts every industry in town, from shopping and dining to lodging and rafting. The railroad, and its 200,000 yearly riders, brings about $250 million a year to the region, said Jack Llewellyn, executive director of the Durango Chamber of Commerce. The railroad employs 200 people during the summer rush and 100 in the off-season.
Rod Barker, owner of Durango’s historic Strater Hotel, said 70 to 80 percent of his guests ride the train.
“It’s really an anchor for Durango and the surrounding area,” Llewellyn said. “They’re very resilient and we hope they keep running.”
Smith can look out his home’s window and see the train’s billowing smoke as it hauls legions of tourists from around the world. He’s watched the railroad keep the town afloat through lean years. It’s with this historical perspective that he questions the motives of those suing the railroad.
Smith is hardly alone in his sentiment.
Sheree and Danny Culhane own the Honeyville shop and farm just down the road from Nelson’s house on U.S. 550. They could hear trees exploding last June as the fire engulfed the forest beside their 100-year-old business.
The Culhanes and their employees evacuated for nine days, and while the fire didn’t make it to their shop, the smoke did.
“The whole experience was terrifying,” Sherry Culhane said. She estimated the business incurred $100,000 in damage as the couple tried to sell their sweet goods out of their garage.
Still, Culhane said she does not blame the train.
“It was so dry,” she said. “Nobody could have stopped it.”
After the fire, Culhane said railroad employees came by the store to see how they were doing.
“This town supports the train,” she said. “If the train didn’t run, tourism would dry up.”
Tom Bell can practically see the Durango train depot from the front of his shop on Main Avenue in downtown Durango. He’s managed the Lanka Blue Jewelry store for 25 years and sees how inextricably linked the train is to businesses around him.
“I don’t want to participate in a lawsuit against my golden goose,” Bell said. “It’s the cornerstone of our economy.”
A “precarious position”
While the railroad chugs back to normalcy a year after the devastating fire, Nelson is still picking up the pieces.
She lives just down the mountainside from where the fire first sparked, but it wasn’t the flames that upended her life. It was the ensuing mudslides which came down like a torrent, the charred soil unable to absorb the downpour pummeling the hillside.
The first flood on July 17 brought 18 inches of mud into her garage. Then, a week later, it happened again.
The flooding closed highways and county roads, inundating houses and businesses in the north Animas Valley with boulders, rocks and avalanches of mud.
“That one just took me to my knees,” Nelson said.
A foot-and-a-half of mud seeped into her kitchen. A boulder rammed her car. The walls in her house still bare faint lines marking where the sludge inched upwards. Nelson’s beloved garden, completely destroyed. It took 23 semi-dump truck loads and $116,000 to dispose of the debris on her property.
Like many people in the area, she didn’t have flood insurance.
“That kind of damage, when you’re retired?” Nelson said. “That’s a huge nut to crack.”
For Nelson, the fact that the train company might have been responsible for the damage put her in an uncomfortable position.
Nelson’s a train fanatic.
Just beyond her front door, framed pictures show a young Nelson grinning at the camera as she played with trains in her childhood home. Above the old photos, a G-Gauge LGB electric train sits on tracks circling the entrance way. Nelson flicked on the power, hooting as the mini locomotive chugged around the room.
Nelson even worked for the Durango & Silverton railroad company, serving eight years as vice president of sales and marketing and another seven as a contractor doing special events.
“I am a huge supporter of the railroad,” Nelson said, a refrain she repeated multiple times during a June interview at her home. As she spoke about the flood damage, the familiar whistle of the Durango & Silverton carried into the kitchen. “But now my relationship with them, of course, has changed.”
For Nelson and others, the decision to take legal action against the train carries personal consequences.
Since entering the lawsuit, Nelson hasn’t spoken to her old colleagues — many of whom she considers good friends. She skipped Narrow Gauge Day and the first day of service, when people line up in Silverton to welcome the season’s first trains. People around town ask why she’s taking legal action.
“It’s a precarious position I’m in,” Nelson said. “However, if the tables were turned and I mistakenly ran a vehicle of mine into train property, I would expect my insurance to pay. My hope is that their insurance will help pay for expenses I incurred.”
Nelson’s attorney, Bobby Duthie, had similar unease entering the lawsuit. A Durango native, Duthie woke up to the train nearly every day of his childhood. He loved it.
“My reluctance was, ‘Should I be involved in litigation against the train management for its decision to operate the train in those drought conditions?'” Duthie said. “Because I love Durango, and I didn’t want to hurt Durango.”
After reading news reports with eye-witnesses and fielding calls from clients regarding property and business losses, Duthie, in tandem with the Denver-based Burg Simpson law firm, decided to take the case.
Duthie said his involvement probably has affected some personal relationships.
“Some people are downright upset with me,” he said. “On the other hand, others are really supportive. There’s two camps.”
The animosity around the town has been too much for some.
One plaintiff contacted by The Denver Post declined to speak publicly for fear of retribution. The individual said he has been confronted on multiple occasions since his decision to sue and said more publicity would only inflame tensions.
Last summer, a vandal targeted railroad owner Harper’s house with graffiti — although the man tagged a neighbor by accident. “(Expletive) the Train” the man wrote, according to the Durango Herald.
“It would be disingenuous to say the circumstances of 2018 weren’t stressful,” Harper said.
But he believes the majority of Durango’s residents fall on his side.
“My guess is 90-percent-plus in the community understands the importance of the railroad, understands how hard the railroad, and my family personally, worked to make sure we’re good citizens, make sure we’re good caretakers of the forest,” he said. “So that 90 percent gives me the faith that I don’t worry too much about the rest of it.”
Meanwhile, Nelson spends her days clearing rocks from her property, replanting lost vegetation. She’s added concrete barriers leading up to her home, and water engineers helped carve a new path to the river in case another flood comes. Every time it rains, she gets anxious.
“This was life-changing for me,” Nelson said. “It’s tenuous because I am a huge supporter of the train. But I feel like some difficult decisions should have been made.”
I rode this train as a kid and it's a treasured (if indistinct) memory. On a couple of recent trips to the area, I passed up chances to ride. It just won't be the same if the coal locomotive is replaced by diesel. Still, wildfires...