Let's Bitcoin takes off. Say you lived in the US and had an online service that dealt in the equivalent of ~20,000 USD or more income for you (personally). What are the laws for income tax on a currency like this? Can you get in trouble with the IRS by simply having tons of BTC that the market values at (currently) almost 5$ per BTC?
The IRS has obliged to report bitcoin transactions of all kinds, no matter how small they are. Accordingly, each US taxpayer is required to keep records of all purchases, sales, investments, or use of bitcoin to pay for goods or services