They sent me a certified letter to an old address informing me of this the day after they did it. Claiming I owed taxes for a period when I wasn't even living in the country. This is some sort of mistake on their end that my accountant is going to have to sort out this week.
You can laugh at crypto all you want and say 'not your keys, not your coins'... but this event is taking a whole new meaning for me. I agree, Celsius and centralized services are bad, but it isn't like the government is any better. Don't think you're safe with your 4 letter acronyms. It is all fun and games until something like this happens to you.
Luckily they emptied the wrong account (which had little money in it) and I rushed to the bank to empty out the account with most of my money in it. Now I get to deal with the cashflow stress of it all.
Living overseas is particularly tricky because they want to see that you’ve established another state in the US with a stronger connection than California. If not, you remain a California resident. Yes, that sounds crazy
The state publishes a brochure with something like 40 criteria used to make the determination. Receiving mail inside the state is one indicator
https://www.ftb.ca.gov/forms/2020/2020-1031-publication.pdf
“You can check out any time you like, but you can never leave”
Thanks. That's crazy. I was already out of the country for 2 years before the period they are claiming that I owed taxes (and I was even paying taxes while I was gone)!
I guess this is going to be a fun battle, sigh.
Kind of like a final “fuck you.”
However, this happens more often in crypto. It is much safer to use a regular bank.
Source for your "more often" comparison though? Certainly people have had their wallets drained because they handed out the keys or stored their stuff on a centralized exchange, but that's not a lot different than a regular theft.
I don't know of anyone who's had a crypto wallet drained by a third party where the wallet was secure.
Bit of a tautology.
This is going back to the rsync v Dropbox discussion.
Yes, those who know all the steps necessary can spin up their own encrypted file sync server. 99.5% of the remaining user base will use Dropbox or some other managed solution.
Same with Coinbase and all the other exchanges. "nOt yOuR kEys" is not a good argument when there are millions going into ads and influencer videos pitching Coinbase as the de facto crypto equivalent to regulated brokerages. On Robinhood, people don't move their funds back to their bank acct after every single transaction and they don't expect to do so in crypto either.
At that point you can't blame the devs or anyone else involved except the users.
The Feds took almost a year to pay me the $700 theybowedbmenwhen I resubmitted my taxes due to forgetting to add one item I took a loss in.
On the good side, I did recently win the 4 bogus parking tickets that I've gotten in the last 6 months. So maybe I'll have good luck with this too!
Apparently, they have been having "computer problems" and have been sending out letters to people who don't actually owe any taxes (because I've been f'cking paying my taxes), like me. I'm not her only client that got jacked by this.
I'll be getting a full refund, including fees, in 4-6 weeks.
What even is a "franchise board"? I would assume something like a Gewerbeamt (entity to register businesses with)? Why do they have bank account data of you? How can they repossess property without a court order?
Background: I'm about to make the jump from academia to industry and in case I overestimated the value of my soul may end up in California. So low-key evaluating whether this could affect me too I guess.
But either way, it's still much better than crypto: There are recourses against state actions. At least in functional judicial states (which I guess is also a tautology xD)
Unless the police harass you on the street and ~~steal~~confiscate all cash you have on hand aka "civil forfeiture" [1]. There are entire small towns that have set themselves up as essentially legal highway robbers [2], and federal agencies also like to rob people [3].
There's also a Last Week Tonight episode around it [4], it's a bit dated but still relevant.
Here in Germany, we can at least contest seizure orders because we are named the owners of, say, a couple grands in cash... but in the US, the cash itself can be named defendant, which is ridiculous but entirely legal [5].
[1] https://www.aclu.org/issues/criminal-law-reform/reforming-po...
[2] https://www.washingtonpost.com/sf/investigative/2014/09/08/t...
[3] https://ij.org/press-release/highway-robbery-in-reno-nevada-...
[4] https://www.youtube.com/watch?v=3kEpZWGgJks
[5] https://www.washingtonpost.com/opinions/george-f-will-the-he...
Franchise board is the California tax agency. Yes, they have bank account tied to a person since that's where they deposit any refunds (or extract any payments they see fit if you don't pay by other mechanism). They'll certainly take money without any court order, they are the tax man and do whatever they want.
The story is very plausible, that's how they operate.
I can relate to your confusion a tiny bit, especially since you want to move here. When I was in Vietnam, a lot of people I interacted with have the dream of moving to America. Unfortunately, they just know what they see in the movies. They don't realize the harsh realities of things like the complexity of paying taxes. In Vietnam, it comes directly from your paycheck and there is VAT. There is no concept of State and Federal level taxes. Even better, you don't need to hire an accountant to do these things for you because if you mess up (and the system is designed to mess you up), it can get a lot more costly. Even with an accountant, it seems I'm not immune.
When I came back to America (not by choice, I got stuck here at the start of covid and VN shut its borders), this is also why I established residency in an income tax free state. I had to get a physical address, drivers license, car registration, etc... it was a lot of work.
My suggestion? If you're going to come here, do more research first.
Nor did they contact my accountant, who I've had for 20 years now and who's address is on file as my primary address for tax related issues.
It is also odd that they pulled the funds from one of my unused accounts that I just kept around for transferring money between the US and Vietnam (Citibank is in both countries and has free < 24 hour transfers) and left my primary bank account (which had the majority of my funds in it) alone.
The taxes they say I owe were during when I was living full time in Vietnam. I was still paying my US taxes during this time as well. This isn't the IRS, it is the FTB. I didn't own a business and I wasn't in California. None of this makes any sense to me.
You should be able to sort this out by filing nonresident returns for the years you were absent. If the state wants to contest the return, then you see them in court. Otherwise they have to refund you.
On the advice of my tax advisors, I've made a point of filing nonresident returns for multiple years after moving out of a state (and out of the USA), even if the earned amount is $0 and the owed amount is $0.
This starts the statute of limitations (where applicable) and it puts you into the bucket of "people who have filed tax returns, which we may or may not audit" versus "people who have not filed tax returns, who we may or may not think should have filed a return".
At the point where you stop filing nonresident returns, you ought to make sure you have essentially zero ties to the state. The nonresident returns you filed should have had a mailing address in a different state. Your drivers license should be from a different state (or expired). You should not be registered to vote in the state. You should not have any bank, brokerage, or other financial accounts with an address in the state. If you own a business, it should not be registered as doing business in the state. No one should be 1099'ing you at an address in that state. Anything that the state's tax board can access in their databases should point to you living elsewhere.
[Obligatory disclaimer that I am not a tax attorney and this is not legal advice. Consult your accountant or a competent attorney as your case may dictate.]
All of this rigamarole is probably necessary because there have been people in the past that were (tax) residents but tried to argue they were not to get out of paying what they owed. So now all the honest people have to jump through extra hoops because some yahoos in the past tried to 'work' the system.
The risk that you loose you coins because you are not able to secure your system is higher, then keeping them on an exchange.
Using a hardware wallet is also a risk. You can loose it, forget your pin or store your backup pass phrase in an unsave / unstable location. For example in a excel sheet or WhatsApp text message to yourself.
- workaround to not pay Western Union's fees
- investment
- trading
- protection against inflation
- money to buy goods from (sometimes questionable) places
- money to buy digital goods
- NFT Stuff
That’s not to say it should be mutually exclusive, but it’s not unique and probably simpler with hard currencies. And probably more safe guarded as well.
Not entirely correct. For the Kraken account, 2FA is a must AND you will still have to enter a code send to Gmail if you connect with an unknown IP address. Even if the PC would be compromised it is impossible for the attacker to send funds anywhere because for this you have a second 2FA. If you want to send money to a different account (does not matter if $ / € or ₿) you also have to verify this by E-mail and 2FA code.
My mum is a good example for a no tech person. You can't imagine what I have been through. To even think she would remember after 3 days, where she stored the keys, after 7 days that she needs them at all and finally after 14 days that I have ever told her anything about it. There are MANY people, where the exchange is the best option. I could go on with other examples, but my mum is a prime example of a non-tech person. For my mum, Internet Explorer is not a browser, but "the button to the internet".
You should still use Kraken, even if you are in Germany. bitcoin.de is vastly inferiour on many levels. Kraken, Gemini, Bitstamp and Coinbase are OGs and have a strong track record.
FDIC [1] is a government insurance scheme on depositors' funds (up to a limit) with any FDIC-inssured bank of financial institution in case of insolvency.
SIPC [2] is the equivalent for brokerages and protects your cash holdings and securities.
Coinbase recently gave a warning [3] that crypto assets could be lost in the event of an insolvency. They also said they don't consider that remotely likely. But the point of that disclosure is that crypto is NOT an SIPC-protected asset.
The crypto mantra of "not your keys, not your coins" [4] is showing itself to be true.
I don't know what the outcome will be of anyone who has any assets in Celsius. It sounds like getting them out now may well be impossible but I haven't read this thoroughly so who knows? Maybe it's too late for Celsius account holders.
But I'd strongly advise anyone who holds crypto with any custodian to move it to your own wallet for your own protection.
[1]: https://www.fdic.gov/
[2]: https://www.sipc.org/for-investors/introduction
[3]: https://cryptoslate.com/coinbase-bankruptcy-wording-triggers...
[4]: https://medium.com/stakefish/not-your-keys-not-your-coins-fa...