First Website Improvements Released!

News updates about the Prohashing pool
Foxx
Posts: 88
Joined: Mon Dec 04, 2017 6:20 pm

Re: First Website Improvements Released!

Postby Foxx » Wed Dec 13, 2017 6:27 pm

AppleMiner wrote:So be illegal miners, declare yourself as international miners. No data will be required and nothing will be mailed to you.

If you want to lie to the pool then I would guess the pool just can't be held responsible when the IRS comes back and asks them later why they didnt send you the required 1099 forms, and they can show, well this person opted in as an international miner so we weren't required, if they lied on the form its not our fault. I think its more an IRS liability. If you dont want to admit your US and get caught they have deniability they tried to comply with the data they were given by you.

But if you have in excess of 5 dozen ASICS I am guessing you are making some money, or paying some bills?
Not sure how you are moving that much around, hosting company and paying for it in crypto, but eventually you may want to cash in some of those coins. Do you think the bank wont notice 10K deposits or 4K electric bills coming and going monthly and start to investigate or ask about taxes?
I think coinbase turns in for US customers accounts that over 20K in use per year? they had a court case but did they start to volunteering that info for 20K and above to IRS since then?

this is all a little naive.

not that i advocate it, but there are ways to do certain things that fly under the radar.
Ewil
Posts: 39
Joined: Thu Oct 12, 2017 2:24 pm

Re: First Website Improvements Released!

Postby Ewil » Wed Dec 13, 2017 6:44 pm

Foxx wrote:
Steve Sokolowski wrote:1099 forms have to be issued to users; there isn't any other way we are willing to operate. ...

... Before you get worried, these forms are not a statement that you owe a certain amount of tax, and we are not withholding earnings. This is standard practice for practically any business transaction, like when Chick-fil-a purchases chicken from its supplier. It is up to users to provide accurate information so that they can receive the documentation necessary for filing their own taxes. ...

yes, but you are also required to file any 1099 you issue, with the US authorities.


This^^. It doesn't matter what the miners stance is on it, merely FILING it puts the miners information on a red flag considering the stance the government has regarding cryptocurrency - which changes as often as the wind does, at this point.

AppleMiner wrote:So be illegal miners, declare yourself as international miners. No data will be required and nothing will be mailed to you.

If you want to lie to the pool then I would guess the pool just can't be held responsible when the IRS comes back and asks them later why they didnt send you the required 1099 forms, and they can show, well this person opted in as an international miner so we weren't required, if they lied on the form its not our fault. I think its more an IRS liability. If you dont want to admit your US and get caught they have deniability they tried to comply with the data they were given by you.

But if you have in excess of 5 dozen ASICS I am guessing you are making some money, or paying some bills?
Not sure how you are moving that much around, hosting company and paying for it in crypto, but eventually you may want to cash in some of those coins. Do you think the bank wont notice 10K deposits or 4K electric bills coming and going monthly and start to investigate or ask about taxes?
I think coinbase turns in for US customers accounts that over 20K in use per year? they had a court case but did they start to volunteering that info for 20K and above to IRS since then?


The fact you think that currency generated in ones own home, using ones own equipment, should be taxed by the government, highlights your mentality - unfortunately. If I grow food in my own backyard, out of seed I bought - should I be taxed for having it? If I provide a service of working in someone elses farm to harvest their own food, and receive some in return for my hard work - should I be taxed on it?
If your answer is "yes, but of course" to either of those questions, I feel sorry for you.

I do not have 5 dozen ASICs. I said between myself and several friends & connections I have, we had that many running here. I have passed this information onto one of them whom is a moderator on a discord of 15k+ miners (among other servers), and has been doing mining since you could do it on a regular CPU. He laughed and said this place will be out of business before the end of next year, *or* operating with so few users, it'll be a ghost town. He's also shared this link & information to his many connections. The immediate responses are to vote with their money... international or not, many will not be mining here any longer once those changes go into effect, in order to send a message - in fact, some have already deleted prohashing as their backup pool.

@Steve, you are violating the very essence of what cryptocurrency is supposed to be - a decentralized, UNTRACEABLE currency that has no oversight, except within its own market by supply & demand. There will be literally nothing stopping the US government from giving you a year or two to operate, and then either demanding or directly seizing, via warrant, your entire blockchain wallet history, since you'd be so kind as to provide usernames, real names, addressed, etc via your system, and digitally signing & tracking every transaction on all the available blockchain networks, by your business history and bookkeeping. They can do this via your IRS filings, or by suddenly deciding everyone who deals in crypto is a criminal by association (as other countries have done) and since you're the sort of person to keep immaculately accurate books, would have zero issue tracking down every single person via their account information or IP and jailing/fining them/confiscating property.

I understand you are trying to run this in a new fashion that hasn't been seen before, as a business system - but you're putting many carts before the horse, and trying to bend over backwards to appease the very system that cryptos were put in place to go AGAINST. Maybe moving to Canada or another country would be beneficial for retaining your customer base, because I guarantee if you polled, via email, every one of your users if they are staying or leaving after this goes into effect - the results will blow your socks off, and not in a good way.
Curly
Posts: 1
Joined: Wed Dec 13, 2017 6:51 pm

Re: First Website Improvements Released!

Postby Curly » Wed Dec 13, 2017 7:17 pm

When issuing a U.S. 1099 Form, you must have the person's physical address, Social Security Number, and their signature. You will keep one copy, you will send one copy to the recipient and one copy to the IRS when you file your taxes. This tells the IRS who your "Independent Contractor" is and where they live. ( https://payable.com/taxes/what-is-a-1099-form )

You are doing this as a tax deduction, not as an ethical move to grant more respect for cryptocurrency. This act ALONE will destroy any mining company that falls for it.

If you have a confusion as to what "cryptocurrency" is and was invented for: https://en.wikipedia.org/wiki/Cryptocurrency

You want to inform a rogue agency, that operates for a corrupt government, controlled by the "Banking Cartels" (who detest, hate and want to destroy the whole concept of cryptocurrency) the names, addresses and private information of people who trusted you?

So what's your plan B for income?
pavvappav
Posts: 61
Joined: Sun Nov 05, 2017 10:19 am

Re: First Website Improvements Released!

Postby pavvappav » Wed Dec 13, 2017 7:40 pm

1099 forms have to be issued to users; there isn't any other way we are willing to operate. While I don't think that many people will leave, I'm sure you can understand that it would be better for the business to fold than for us not to issue these forms. We'll be requesting addresses and names beginning in a few weeks.

There will be an option to declare yourself an international customer, in which case no form will be required.


According to https://www.irs.gov/individuals/interna ... ent-aliens it sounds like non-us residents who use prohashing will have to pay taxes to the IRS and you will be reporting their earnings to the IRS. If this is correct, you must issue 1099 forms to all users -- US residents or not. This inclusion appears to occur because Prohasing is _in_ the US. Failing to do so may be seen as assisting in tax evasion.

EDIT: Add quote to which I'm replying.
pavvappav
Posts: 61
Joined: Sun Nov 05, 2017 10:19 am

Re: First Website Improvements Released!

Postby pavvappav » Wed Dec 13, 2017 7:56 pm

AppleMiner wrote:So be illegal miners, declare yourself as international miners. No data will be required and nothing will be mailed to you.

If you want to lie to the pool then I would guess the pool just can't be held responsible when the IRS comes back and asks them later why they didnt send you the required 1099 forms, and they can show, well this person opted in as an international miner so we weren't required, if they lied on the form its not our fault. I think its more an IRS liability. If you dont want to admit your US and get caught they have deniability they tried to comply with the data they were given by you.

But if you have in excess of 5 dozen ASICS I am guessing you are making some money, or paying some bills?
Not sure how you are moving that much around, hosting company and paying for it in crypto, but eventually you may want to cash in some of those coins. Do you think the bank wont notice 10K deposits or 4K electric bills coming and going monthly and start to investigate or ask about taxes?
I think coinbase turns in for US customers accounts that over 20K in use per year? they had a court case but did they start to volunteering that info for 20K and above to IRS since then?


The reporting requirement is on prohashing. According to https://www.irs.gov/businesses/small-bu ... ontractors the residency status of the independent contractor is not a factor. Based on Steve's posting, the relationship of miners to prohasing is as indepdndent contractors, hence the requirement for 1099 forms.

On financial regulations, because does businuess with non-us exchanges, and based on the updated language to the AML legisation before congress, prohashing may also fall under Foreign Bank and Financial Accounts (FBAR) regulations ( https://www.irs.gov/businesses/small-bu ... ounts-fbar )
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Steve Sokolowski
Posts: 3036
Joined: Wed Aug 27, 2014 3:27 pm
Location: State College, PA
Contact:

Re: First Website Improvements Released!

Postby Steve Sokolowski » Wed Dec 13, 2017 7:58 pm

pavvappav wrote:
1099 forms have to be issued to users; there isn't any other way we are willing to operate. While I don't think that many people will leave, I'm sure you can understand that it would be better for the business to fold than for us not to issue these forms. We'll be requesting addresses and names beginning in a few weeks.

There will be an option to declare yourself an international customer, in which case no form will be required.


According to https://www.irs.gov/individuals/interna ... ent-aliens it sounds like non-us residents who use prohashing will have to pay taxes to the IRS and you will be reporting their earnings to the IRS. If this is correct, you must issue 1099 forms to all users -- US residents or not. This inclusion appears to occur because Prohasing is _in_ the US. Failing to do so may be seen as assisting in tax evasion.

EDIT: Add quote to which I'm replying.


So far our plan is not to issue the forms to international customers. While that might change if we hear otherwise, I haven't been advised that international customers are affected.
jimbo207
Posts: 16
Joined: Wed Aug 16, 2017 7:12 am

Re: First Website Improvements Released!

Postby jimbo207 » Wed Dec 13, 2017 7:59 pm

pavvappav wrote:
1099 forms have to be issued to users; there isn't any other way we are willing to operate. While I don't think that many people will leave, I'm sure you can understand that it would be better for the business to fold than for us not to issue these forms. We'll be requesting addresses and names beginning in a few weeks.

There will be an option to declare yourself an international customer, in which case no form will be required.


According to https://www.irs.gov/individuals/interna ... ent-aliens it sounds like non-us residents who use prohashing will have to pay taxes to the IRS and you will be reporting their earnings to the IRS. If this is correct, you must issue 1099 forms to all users -- US residents or not. Failing to do so may be seen as assisting in tax evasion.


Except no 1099s need to be filed as no USD is transferred between Prohashing and its customers. Crypto is not legal tender, its ones and zeros, valued by the buyer at time of sale. If someone gives me stocks, the IRS need not be concerned until the time of sale, at which time I am taxed on the difference of the sale price and the cost basis.

And yes, I said customer, not independent contractor. The brothers have always referred to us as customers in the forums here. While that may be semantics, last I checked we pay 5% of our coinage to Prohashing. I dont 1099 my customers, we claim their payment - expenses as income. Which, as I see it, is all PH need do. Coins sold - expenses = income.
pavvappav
Posts: 61
Joined: Sun Nov 05, 2017 10:19 am

Re: First Website Improvements Released!

Postby pavvappav » Wed Dec 13, 2017 8:02 pm

jimbo207 wrote:
pavvappav wrote:
1099 forms have to be issued to users; there isn't any other way we are willing to operate. While I don't think that many people will leave, I'm sure you can understand that it would be better for the business to fold than for us not to issue these forms. We'll be requesting addresses and names beginning in a few weeks.

There will be an option to declare yourself an international customer, in which case no form will be required.


According to https://www.irs.gov/individuals/interna ... ent-aliens it sounds like non-us residents who use prohashing will have to pay taxes to the IRS and you will be reporting their earnings to the IRS. If this is correct, you must issue 1099 forms to all users -- US residents or not. Failing to do so may be seen as assisting in tax evasion.


Except no 1099s need to be filed as no USD is transferred between Prohashing and its customers. Crypto is not legal tender, its ones and zeros, valued by the buyer at time of sale. If someone gives me stocks, the IRS need not be concerned until the time of sale, at which time I am taxed on the difference of the sale price and the cost basis.

And yes, I said customer, not independent contractor. The brothers have always referred to us as customers in the forums here. While that may be semantics, last I checked we pay 5% of our coinage to Prohashing. I dont 1099 my customers, we claim their payment - expenses as income. Which, as I see it, is all PH need do. Coins sold - expenses = income.



Crypto is a virtual currency based on IRS regulations. Mined coins are considered earned income at the time of mining. The sale of coins after mining for a value other than the value when they were mined is considered capitol gains/loss. If you sell the coins less than 1 year after mining, that would be shot term capitol gains tax.

Source: https://www.irs.gov/newsroom/irs-virtua ... y-guidance

The requirements under which the $600 dollar rule (referenced in their first post) is derived is the IRS guidance on independent contractors and suppliers. It doesn't matter what Steve calls us at the end of the day, it depends on how the IRS classifies us. Historically, they choose the classification that gets them the most tax revenue. :)
gnode
Posts: 46
Joined: Sun Nov 27, 2016 12:44 pm

Re: First Website Improvements Released!

Postby gnode » Wed Dec 13, 2017 8:06 pm

Steve and Chris, you need a different lawyer. The guy you hired is in left field on this one. We are just using your software with our own equipment and you pay us nothing, we pay you a fee. Like a cloud service such as Amazon Web services. Amazon doesn't send out 1099 to subscribers.
pavvappav
Posts: 61
Joined: Sun Nov 05, 2017 10:19 am

Re: First Website Improvements Released!

Postby pavvappav » Wed Dec 13, 2017 8:09 pm

Steve Sokolowski wrote:
pavvappav wrote:
1099 forms have to be issued to users; there isn't any other way we are willing to operate. While I don't think that many people will leave, I'm sure you can understand that it would be better for the business to fold than for us not to issue these forms. We'll be requesting addresses and names beginning in a few weeks.

There will be an option to declare yourself an international customer, in which case no form will be required.


According to https://www.irs.gov/individuals/interna ... ent-aliens it sounds like non-us residents who use prohashing will have to pay taxes to the IRS and you will be reporting their earnings to the IRS. If this is correct, you must issue 1099 forms to all users -- US residents or not. This inclusion appears to occur because Prohasing is _in_ the US. Failing to do so may be seen as assisting in tax evasion.

EDIT: Add quote to which I'm replying.


So far our plan is not to issue the forms to international customers. While that might change if we hear otherwise, I haven't been advised that international customers are affected.


Understood. I included the links to IRS regulations to cite my sources. With penalties for failing to report income paid to independent contractors upwards of $250 per incident/account, I'm certain that Prohashing is going to make sure everything is on the level.

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