Text message from Facebook friend: “Quick question: what are your thoughts on bitcoin? My sons keep telling me I need to get into. My accountant at present advises not. I only ask as I know you are a fountain of knowledge in the accounting world and just wanted to learn your opinion. Thanks!”
Me: “What you wrote already exactly summarizes it. Younger people say it is the future and therefore is valuable. Professionals of our generation see no real inherent value other that the obvious value of contemporary culture supporting it. My primary role and education is in helping people who have been snagged for not reporting their bitcoin transactions. That part is undeniably real.”
Friend: “Yeah – my accountant was ruffled when one of my sons provided info about his bitcoin dealings after his taxes were filed earlier this year! My sons say this will be the way all transactions will be handled in the future. I am not so sure….however, things change. I never have cash or coins on me anymore!”
Me: “The fear I hold personally is that younger people think they can outsmart the government and will learn the hard way. Even if transactions are all cyber, reporting and taxes are the same. That’s the point they are missing. IRS intends to “make examples” of non-reporters with high profile tax evasion prosecutions this year and that’s why your accountant is concerned. Plus, the accountant can get in trouble for signing a false return.”
Friend: “I get it. It all makes me nervous.”