The U.S. government considers bitcoin property, meaning every single purchase made with bitcoin has to be reported on your taxes.
If you've held those bitcoins for less than a year and sell them, that cash will be taxed as income. If you've held for over a year, it's taxed as a capital gain — which could run 20 percent.
A bipartisan bill was presented to Congress in September in an effort to create a tax exemption for cryptotransactions under $600.
Ok now the only thing is this is completely illegal. Since most of our laws came out of the Bible I'll use that to explain. In Bible Jesus's followers asked whether or not to pay taxes and Jesus asked, "who's face is on money?" and they answered ," Caesar." Jesus then said "well give to Caesar what is his." Now this could be used for our current money system.
Satoshi Nakamoto created bitcoin to be tax free therefore taxing people on a currency without permission of the owner is completely illegal. Bitcoin created by Satoshi Nakamoto was called a currency. The government cannot just made up a tax and call Bitcoin whatever they want.
If you own fiat pay the government. If you own bitcoin you pay them nothing.