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IRS Launches Investigation into Bitcoin Tax Evasion

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The U.S. Internal Revenue Service is now investigating people who used Bitcoin in order to avoid paying taxes.

The IRS asked a California court to order Coinbase, a Bitcoin exchange company, to release the identities of their U.S. users of its service from 2013 to 2015.

In a filing Thursday to the U.S. District Court in San Francisco, the IRS said they have found several cases in which people were using Bitcoin in order to evade taxes.

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Stock Photo: WASHINGTON, DC, USA – MARCH 23, 2006: IRS building sign. Internal Revenue Service. (Rob Crandall / Shutterstock.com)

“Because the IRS considers virtual currencies to be property, United States taxpayers can realize a taxable gain from buying, selling, or trading in virtual currencies. There is a likelihood that United States taxpayers are failing to properly determine and report any taxable gain from such transactions,” the IRS argued.

Coinbase is one of the most popular virtual currency exchanges and serves as a way for people to use bitcoin in order to perform transactions. Founded in 2012, Coinbase is a San Francisco company with 4,800,000 users, according to their website.

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Stock Photo: CIRCA MARCH 2014 – BERLIN: the logo of the brand “Coinbase”. (360b / Shutterstock.com)

The IRS found two taxpayers used separate Coinbase accounts to hide Bitcoin transactions as expenses on their tax returns. Consequently, the IRS argues that other users are also evading taxes through such tax evasion schemes.

Coinbase said they would oppose the demand, saying they have done anything wrong. “Although Coinbase’s general practice is to cooperate with properly targeted law enforcement inquiries, we are extremely concerned with the indiscriminate breadth of the government’s request,” the company said in a statement.

Bitcoin is the most popular alternative currency with a valuation of nearly $10 billion. Introduced on Halloween in 2008, the currency was invented by an unknown programmer or group of programmers under the name of Satoshi Nakamoto. Bitcoins are created as a reward competition system where users offer their computing power to verify and record bitcoin transactions. The computers involved in this system are called miners and successful miners are rewarded with transaction fees and new bitcoins.

Bitcoins can then be exchanged for other currencies, products or most notably drugs. In fact, the virtual cryptocurrency came under fire as it was first used on the Silk Road, an online website that allowed users to anonymously buy and sell drugs using Bitcoin.

IRS Tax rules for Bitcoin were created in 2014. The IRS said that people should treat their virtual currency as property and not as money for tax purposes. For example, if someone buys a Bitcoin, then sells it later, the valuation of the property should be reported to the government.

 

Mark Zuckerberg Shares Facebook’s Plan to Stop Fake News

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Facebook’s CEO Mark Zuckerberg is working on stopping fake news from spreading on the popular social media website. Outlined in a Facebook post, Zuckerberg reveals plans on releasing new systems to stop misinformation including: third-party verification services, automated detection tools and easier ways for Facebook users to report fake news stories.

“The problems here are complex, both technically and philosophically,” Mr. Zuckerberg wrote. “We believe in giving people a voice, which means erring on the side of letting people share what they want whenever possible.”

Following Donald Trump’s Presidential victory, many people accused Facebook for swaying the election by allowing for fake news stories to go viral on the platform. Zuckerberg called the belief “a pretty crazy idea.” Facebook’s CEO later explained that less than one percent of the news posted on the website was fake.

 

Even President Obama called out Facebook for the spread of fake news stories on their website. During a news conference in Berlin on Thursday, Obama called out the problem with misinformation spreading on Facebook and in the media.

“Because in an age where there’s so much active misinformation and its packaged very well and it looks the same when you see it on a Facebook page or you turn on your television,” Obama said. “If everything seems to be the same and no distinctions are made, then we won’t know what to protect.”

During the last three months of the election, Buzzfeed reports that fake news stories led to nearly 9 million shares, reactions and comments on Facebook. In addition, a large majority of those fake news stories were in support of Donald Trump and attacked Hillary Clinton. In fact, the most shared fake news story circulated on Facebook was a false story titled “Pope Francis shocks world, endorses Donald Trump for President”. That single story had 960,000 shares.

According to Paul Horner, the owner of the fake news site reported earning an estimated $10,000 a month in advertising revenue from Facebook and Google. In an interview with the Washington Post, Horner explained, I think Donald Trump is in the White House because of me.”

Horner went on to explain, “My sites were picked up by Trump supporters all the time. I think Trump is in the White House because of me. His followers don’t fact-check anything — they’ll post everything, believe anything. His campaign manager posted my story about a protester getting paid $3,500 as fact. Like, I made that up. I posted a fake ad on Craigslist.”

Snapchat Confidentially Files for an IPO

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Last October, researchers surveyed thousands of teenagers across America and found that Snapchat is the most popular social media app among teens beating Facebook, Twitter and Pinterest. Several weeks later, Snap is confidentially working on their IPO process.

Snap Inc. has filed paperwork for an initial public offering, which may value the popular social messaging app at $25 billion. Making the popular video sharing app among teens, one of the highest IPO in recent years.

An IPO is expected as early as March, which could value the company at between $20 billion to $25 billion. At the moment, Snapchat has not publicly broken the news, when they will start trading, or how much the company is looking to raise in the the IPO. But, if Snap does goes public, it will be the largest company to go public on a U.S. exchange since Chinese e-commerce company Alibaba Group made it’s debut at a $168 billion valuation.

The plan to go public has been on the mind of Snap’s CEO, Evan Spiegel, for a long time. At a May 2015 tech conference Spiegel said, “We need to IPO, we have a plan to do that. An IPO is really important.”

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Stock Photo: RIGA, LATVIA – SEPTEMBER 8, 2016: Snapchat app on App Store. (Kaspars Grinvalds / Shutterstock.com)

 

Last week, Snapchat released vending a new product in Venice Beach, Snapchat Spectacles, video glasses allow users to share 10 second video clips and upload them directly to Snapchat. Since then, those same pair of glasses are on sale for up to $1,000 each.

The Snapchat spectacles are on sale in Venice Beach for $129. When consumers purchase a pair of spectacles, the “Snapbots”, vending machines selling the product, say “our very own vending machines that dispense Spectacles and never seem to stay in one location for too long”.

After a consumer purchases a pair of spectacles all they have to do is pair them with a phone. The glasses are always on and the LED ring on the front of the glasses will turn on when users press the button to start recording. The videos will automatically appear in their memories tab.

Snapchat’s CEO told the Wall Street Journal that he plans on releasing the product in stages. “We’re going to take a slow approach to rolling them out. It’s about us figuring out if it fits into people’s lives and seeing how they like it.”

Snapchat is expected to reach nearly 60 million users in the United States by 2016 and that number is expected to increase by 13.6 percent by 2017, according to recent studies. In addition, studies argue that Snapchat generates 10 billion video views per day.

Study: Florida’s “Stand Your Ground” Linked to Homicide Increase

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A new study finds Florida’s “Stand Your Ground” Law is linked to an increase in homicides.

Following the 2012 shooting death of Trayvon Martin, Florida’s “Stand Your Ground” was thrown into the national spotlight. Now, researchers argue that the law is linked to a significant rise in gun-related homicides.

The Study

Published in the Journal of the American Medical Association (JAMA), the paper found that the “Stand Your Ground Law” was associated with a 24.4 percent increase in homicides and 31.6 percent increase in gun related homicides.

Researchers analyzed the monthly homicide rates in Florida data using numbers from the Centers for Disease Control and Prevention and the Wide-ranging Online Data for Epidemiologic Research (WONDER). Analysts examined the monthly homicide rights before and after the enacted legislation and found that prior to the law’s implementation, the average monthly homicide rate in Florida was 0.49 deaths per 100,000, and the rate of homicide by firearm was 0.29 deaths per 100,000. However, after the law took effect there was an abrupt increase in the monthly homicide rate and rate of homicides by firearms.

Researchers argued, “The implementation of Florida’s stand your ground self-defense law was associated with a significant increase in homicides and homicides by firearm but no change in rates of suicide or suicide by firearm.”

What is the “Stand Your Ground” law?

Florida was the first state to pass the “Stand Your Ground” law in 2005, which allowed for people to generally stand their ground instead of retreating if they reasonably believe doing so will “prevent death or great bodily harm”. Since then, several states have enacted similar laws. While each state’s laws vary, but typically you have the right to not retreat.

23 different states that have passed stand your ground laws:

  1. Alabama
  2. Alaska
  3. Arizona
  4. Florida
  5. Georgia
  6. Indiana
  7. Kansas
  8. Kentucky
  9. Louisiana
  10. Michigan
  11. Mississippi
  12. Montana
  13. Nevada
  14. New Hampshire
  15. North Carolina
  16. Oklahoma
  17. Pennsylvania
  18. South Carolina
  19. South Dakota
  20. Tennessee
  21. Texas
  22. Utah
  23. West Virginia

Advocates of the Stand Your Ground law assert that it would lead to fewer burglaries, because it would give people the ability to defend themselves, if they feel threatened. However, opponents of the Stand Your Ground law argued that these type of laws would disproportionately affect minorities as threats prompted by racial stereotypes would lead to unnecessary murders.

Google To Start Banning Fake News Sites From Using Adsense

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Google will soon ban websites that write fake news stories from using their advertising network.

As critics assert Facebook’s news feed prominently features news stories with false information, Google will begin banning websites from using Adsense on their website

Google announced that its advertising network will be soon closed to websites that promote fake news. This new policy could shut down revenue streams for hundreds publications that rely on promoting false news stories. The decision comes after Facebook came under fire for not preventing fake news surrounding the 2016 US Presidential election.

In a statement given to Reuters, a Google spokesperson said, “Moving forward, we will restrict ad serving on pages that misrepresent, misstate, or conceal information about the publisher, the publisher’s content, or the primary purpose of the web property.”

Recently, the topic of fake news has become a national issue but, Facebook’s CEO Mark Zuckerberg has downplayed the controversy. Zuckerberg called the idea”crazy”. However, a high ranking source close to Gizmodo, reported that Facebook developed a solution to address false news articles from going viral on their platform. But, were unwilling to implement it in fear of “upsetting conservatives.”

It is believed that viral fake news stories helped influence the outcome of the presidential election that led to Donald Trump’s victory. According to the The New York Times, Facebook employees were reportedly “aware” of the social network’s influence on the election and were unwilling to make any serious changes.

The Trending Topics episode paralyzed Facebook’s willingness to make any serious changes to its products that might compromise the perception of its objectivity,” Facebook employees told The New York Times.

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DEAUVILLE, FRANCE – MAY 26, 2011 : Facebook CEO Mark Zuckerberg Press conference at the summit G8/G20 about new technologies – Deauville, France on May 26 2011 (Frederic Legrand – COMEO / Shutterstock.com)

While, Facebook’s CEO is dealing with the controversy of fake news, Google was forced to address a fake news story that made it to the top of Google search results. Recently, when users searched for “who won the popular vote,” a news website falsely reported that President-elect Donald Trump had won. When in fact, Hillary Clinton won the popular vote in the U.S. election.

A report analyzing fake news stories found that conservative media groups published misleading information 38 percent of the time in comparison to liberal media’s 20 percent.

Over 400 Million Adult Friend Finder Accounts Hacked

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Friend Finder Network, Inc. is an adult services company and was reportedly hacked last October affecting 400 million accounts, which makes it the largest security hack ever.

The hack

Friend Finder Network, Inc. has several different websites and businesses including: Adultfriendfinder.com, Cams.com, Penthouse.com, Stripshow.com, and iCams.com. Over 400,000,000 accounts were affected in the hack, which was first reported by LeakedSource.com.

Who’s affected?

This is the second time Friend Finder has been hacked in the last two years. Hackers reportedly breached FriendFinder Networks last month and gaining access to AdultFriendFinder, which calls itself the “World’s largest sex & swinger community.” The hack also revealed the e-mail addresses and passwords to over 62 million accounts on Cams.com, a live webcam website and over 8 million accounts on several other Friend Finder adult websites.

How did hackers gain access to FriendFinder’s network of adult websites?

FriendFinder’s network was reportedly hacked through a local file inclusion exploit. A local file inclusion exploit works by affecting web applications that allow users to upload files to the website’s server. Once the file is executed by the server, the local file inclusion allows for a hacker to gain access to private information and possibly place code on the server, that allows for users to execute certain commands.

At this moment, LeakedSource says they do not plan on making the data searchable to the general public.

Is this serious?

Several major websites and companies have become victims of hacks including MySpace, Weebly, and Yahoo.

In June 2013 hackers were able to gain access to MySpace’s over 360 million users. MySpace later issued a statement saying, “Email addresses, Myspace usernames, and Myspace passwords for the affected Myspace accounts created prior to June 11, 2013 on the old Myspace platform are at risk.”

yahoo-hack
Stock Photo: Ostersund, Sweden – June 23, 2016: Yahoo is a multinational Internet corporation globally known for its Web portal, search engine Yahoo Search. (IB Photography / Shutterstock.com)

Just last week, Yahoo announced that they were hacked earlier than previously reported. It was reported that over 500 million user accounts were breached and private information including names, birthdates and unprotected security questions were revealed. Yahoo initially explained that a “recent investigation” but, hackers had access to Yahoo’s computer network at least a year and a half before the company launched an investigation and discovered personal information had been compromised.

In addition, the web design platform Weebly was hacked in February affecting 43 million accounts. Weebly responded to the hack by saying, “We do not believe that any customer website has been improperly accessed.”

Update: Lawmakers Call Facebook To Remove “Ethnic Affinities” Feature

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Update: Facebook will ban advertisers from using “ethnic affinity” targeting.

After a backlash by civil rights groups, Facebook users, Congressional Black Caucus and other U.S. lawmakers, Facebook has announced they will no longer allow users to use “ethnic affinity” to target users by their ethnicity.

“Recently, policymakers and civil rights leaders have expressed concerns that advertisers could misuse some aspects of our affinity marketing segments,” Erin Egan, Facebook’s vice president of U.S. public policy and chief privacy officer, said in a blog post. “Specifically, they’ve raised the possibility that some advertisers might use these segments to run ads that discriminate against people, particularly in areas where certain groups have historically faced discrimination — housing, employment and the extension of credit.”


The Congressional Black Caucus has taken a stand against a Facebook advertising feature, Ethnic Affinities, which allows for businesses to exclude ethnic groups and races from receiving housing advertisements. Lawmakers argue the Facebook advertising program is a violation of anti-discrimination housing laws.

In an open letter addressed to Facebook’s CEO, the Congressional Black Caucus write they are concerned about the “Ethnic Affinities” advertising feature.

“We are writing to express our deep concerns with reports that Facebook’s ‘Ethnic Affinities’ advertising customization feature allows for advertisers to exclude specific racial and ethnic groups when placing housing advertisements.”

The Caucus added, “This is in direct violation of  the Fair Housing Act of 1968, and it is our strong desire to see Facebook address this issue immediately,” reads the letter.

However, Facebook responded to the lawmakers by arguing that this type of advertising is commonplace in the advertising industry.

“We’ve heard from groups and policy makers who are concerned about some of the ways our targeting tools could be used by advertisers. We are listening and working to better understand these concerns.”

The Facebook feature is called “Ethnic Affinities” and it lets advertisers posting ads for an apartment or house to target certain races and ethnic groups and exclude others.

It is important to point out that the Fair Housing Act of 1968 makes it illegal to “make, print, or publish, or cause to be made, printed, or published any notice, statement, or advertisement, with respect to the sale or rental of a dwelling that indicates any preference, limitation, or discrimination based on race, color, religion, sex, handicap, familial status, or national origin.”

This news comes after Facebook announced their quarterly earnings. Current estimates suggest Facebook is on track to earn $27 billion in revenue this year. So far, in the company’s third quarter the social media giant was able to increase by 56% and earn $2.38 billion. However, Facebook’s Chief Financial Officer Dave Wehner said that the advertising growth will eventually “come down”. But, the company plans to increase engagement, users and time spent on the app by adding additional video features.

How Google and YouTube Will Announce Election Day Results

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Google announced that as soon as the election polls close in the United States election results will be displayed within search engine results.

Users who search for “election results” will be able to see a detailed breakdown of the election results, including state referenda, amendments, propositions, Congressional, Senatorial and Presidential races, Google explained in a statement.

“Starting when the polls close on Election Day, you will be able to find U.S. election results integrated right into your Google searches in over 30 languages around the world,” Google explained in a blog post. “You’ll also be able to see detailed updates and results of the Presidential, Senatorial, Congressional, Gubernatorial races as well as state-level referenda and ballot propositions,” Google added.

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Stock Photo: MOUNTAIN VIEW, CA/USA – NOV 22, 2014: Exterior view of Google’s Youtube office. It is a multinational company specializing in Internet related services and products. (Asif Islam / Shutterstock.com)

The results of the U.S. election will be updated every 30 seconds. Tabs across the top of the search results will also allow users to browse between different election results. The results will also include a detailed breakdown. The breakdown will include the number of electoral votes a presidential candidate needs to win. Google also announced their plans to livestream election news on YouTube via NBC, PBS, MTV, Bloomberg, and many other YouTube channels.

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NEW YORK – JUL 16, 2016: Donald Trump speaks during a press conference on July 16, 2016 in New York. (JStone / Shutterstock.com)

The tech giant explains their goal to help everyone find the latest 2016 election information. “Whether you voted early, plan to head to the polls tomorrow, host an Election Night watch party, or live stream the victory speech from America’s new President-Elect, we’re here to help”

It is important to point out that Google also revealed that searches for “how to vote” were up more than 200 percent between October and November than they were during the last Presidential election. Google also explained that Americans learning how to vote were found primarily in battleground states of Florida, Ohio and Pennsylvania. Other social media platforms have also been impacted by the election. Americans have spent over 20 million hours on YouTube watching the U.S. presidential debate.

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Saint Louis, MO, USA – March 12, 2016: Democratic presidential candidate and former Secretary of State Hillary Clinton campaigns at Nelson-Mulligan Carpenters Training Center in St. Louis. (Gino Santa Maria / Shutterstock.com)

Companies such as Facebook and Google have been working on getting people more information surrounding the U.S. election. For instance, the Ad council teamed up with Facebook to created GoVoteBot, an automated bot that provides information on how and where to vote.

As the election results are only hours away, studies have shown that U.S. Presidential election is causing men and women to stress. A study from the American Psychological Association revealed that more than 50 percent of Americans are feeling stressed about the 2016 Presidential election.

Largest Supermoon in Nearly 70 Years Will Occur on November 14th

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This month’s supermoon will be the largest in nearly 70 years. On November 14th, people will be able to see the moon extremely close-up, the result of the moon’s elliptical orbit and the position of Sun and Earth. This phenomenon is called the “supermoon”, which is just another way to say that the moon will look larger than normal. On November 14th the moon will appear to be about 14 percent bigger and 30 percent brighter than a normal full moon.

While there have been many supermoons in history, this month’s full moon is not normal. In fact, this supermoon will be the largest since 1948. This is because the moon does not travel around Earth in a perfect circle. Instead, the moon travels in an elliptical orbit, which means the moon’s distance from earth is not always the same. The moon’s average distance from earth is 238,855 miles but, on November 14th the Moon will be only 223,690 miles away.

It’s important to note that when the moon is this close unique scientific phenomena starts to happen. The moon’s gravity pulls at the earth causing the rises and falls in sea levels, this is why you will see tides in lakes. But, on November 14th, the moon will be so close to Earth that the ocean tides will be higher.

nasa
Stock Photo: NASA sign at Cape Canaveral, Kennedy Space Center with blue cloudy sky background. Elements of this image furnished by NASA. (Shutterstock.com)

The next time the moon will be this close will not happen again until November 25, 2034. “The full moon of November 14 is not only the closest full moon of 2016 but also the closest full moon to date in the 21st century. The full moon won’t come this close to Earth again until November 25, 2034,” NASA explains in a statement.

The phenomenon will happen again on December 14th but, it will not be as bright as November’s supermoon. However, NASA explains December’s supermoon will be so bright it will hide the Geminid meteor shower.

“The supermoon of December 14 is remarkable for a different reason: it’s going to wipe out the view of the Geminid meteor shower. Bright moonlight will reduce the visibility of faint meteors five to ten fold, transforming the usually fantastic Geminids into an astronomical footnote. Sky watchers will be lucky to see a dozen Geminids per hour when the shower peaks. Oh well, at least the moon will be remarkable,” NASA explains.

U.S. Unemployment Rate Drops to 4.9 Percent

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An October employment report illustrates employers have been actively hiring causing the unemployment rate to decrease, which could mean a December interest rate increase from the Federal Reserve.

There were 161,000 payroll jobs created last month, according to the latest Labor Department report. In addition, in a revised August and December report showed 44,000 more jobs were created than previously reported.

Following the release of the October employment report that highlighted unemployment numbers down to 4.9 percent, Federal Reserve Vice Chair Stanley Fischer said on Friday during an International Monetary Fund economics conference that the U.S. labor market is in a “powerful” recovery. Fischer argues that the economy is still growing, as the U.S. labor market is nearly at full employment.

Despite Fischer’s comments on the U.S. economy, Fischer did not suggest that the Federal Reserve will increase interest rates during their December meeting, which is a year since the first post-housing-crisis rate increase. Fischer explained, “The markets put a probability of above 70 percent on the rate being increased in December.”

Fischer continued, “This recovery has been and continues to be powerful in terms of one of our two main targets — employment — and it is my view that the labor market is close to full employment.”

Created in 1913 with the Federal Reserve Act under President Woodrow Wilson, was a compromise between Republicans and Democrats. It is important to note that the Fed’s main goals are to: maximize employment, stabilize prices, and moderate long term interest rates. With 12 Federal Reserve Banks across the United States each is responsible for member banks in their region. 

federal-reserve-bank-of-new-york
Stock Photo: New York, USA – June 18, 2016: Federal Reserve Bank of New York (Andriy Blokhin / Shutterstock.com)

The main reason the Federal Reserve has not increased rates is partly due low rate of inflation, due to low oil prices. However, as energy prices stabilize and the cost of housing and medical care increases, inflation could hit the Federal Reserve’s 2 percent target threshold soon.

The Federal Reserve’s inflation tool, the PCE index, has increased to 1.2 percent in the last 12 months. In addition, the Dow and S&P 500 are at record highs, the median price for a home is at $231,000 which is at pre-housing crash highs, the price of gas are stabilizing to the record rate of $2.15/gallon. Most importantly, the average income for the bottom 99% grew 3.9% in 2015, which is the best growth in the past 17 years.