ProPublica said that it doesn’t know the source of its secret tax information on the super-rich, and admitted that a hostile state could have sent it

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  • ProPublica said it does not know the identity of the source who passed them a trove of IRS files.
  • The outlet published a bombshell investigation into the tax practices of the mega-rich.
  • ProPublica said it is confident of the material even if the source had hostile motives.
  • See more stories on Insider’s business page.

ProPublica says it does not know the identity – or motivations – of the source who passed it private tax documents for its recent bombshell investigation of the ultra-rich.

On Tuesday, the left-leaning outlet published its a flagship investigation based on the private IRS documents of billionaires such as Jeff Bezos, Elon Musk, Michael Bloomberg and Warren Buffett.

The federal government is now investigating the origins of the leak, which it says was illegal. In an accompanying article, ProPublica’s CEOs Stephen Engelberg and Richard Tofel revealed that they don’t know who sent the documents.

“We do not know the identity of our source,” they wrote. “We have considered the possibility that information we have received could have come from a state actor hostile to American interests.”

Engelberg and Tofel said the source told them they were motivated by ProPublica’s previous reporting on taxation, but, the CEOs said, “we do not know for certain that is true.”

Noting recent hacks on US servers from hostile states, they added: “We have long held that those motives are irrelevant if the information is reliable.”

They said that they had vetted the information extensively by comparing the documents to those they already had access to.

“In every instance we were able to check – involving tax filings by more than 50 separate people – the details provided to ProPublica matched the information from other sources,” they wrote.

The ProPublica story revealed the actual rates of tax the ultra-rich pay, as well as a wide array of details of their tax practices.

Explaining why they published the private information, Engelberg and Tofel argued that it is in the public interest to reveal the tax avoidance practices of the billionaires, who were often found to have paid proportionately much less than regular Americans.

Tactics highlighted by ProPublica include low-interest borrowing to keep tax bills down, and an allegation that Bezos claimed a tax credit designed for much lower-income households than his.

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Bitcoin slides below $50,000 with $260 billion wiped off the crypto market as Biden’s tax proposals crush risk appetite

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Bitcoin slid below $50,000 on Friday, extending losses for a seventh day in a row, while simultaneous drops in other digital currencies erased $260 billion off the total value of the cryptocurrency market.

The world’s most widely traded digital asset fell 4% to around $49,130, ether fell 7% to around $2,220, Dogecoin fell 17% to $0.17, and XRP dropped 8%.

The crypto market has come under fresh pressure after reports that US President Joe Biden is looking to double the capital gains tax rate on wealthy investors.

Biden’s proposals are aimed at funding expanded childcare and education programs. Federal tax rates, including an existing surtax on investment income, could be as high as 43% for those earning more than $1 million, according to Bloomberg.

The Internal Revenue Service has been executing tax collection on crypto gains. Crypto is taxed as property, not currency. The agency began requiring crypto investors to disclose transactions on their 2019 tax returns, asking whether they “received, sold, sent, exchanged or otherwise acquired any financial interest in any digital currency.”

“It is clear that bitcoin is more sensitive to capital gains tax threats than most ‘asset’ classes,” Jeffrey Halley, a senior market analyst at OANDA, said. “The threat of regulation, either directly in developed markets or indirectly via the taxman, has always been crypto’s Achilles’ heel. Yes, you could store those juicy capital gains offshore as a US citizen, but we know how the G-Man treats tax evaders. It is not pretty.”

JPMorgan warned this week there could be further downside for bitcoin if it fails to climb back above the $60,000-level. Guggenheim’s Scott Minerd also recently said bitcoin could pull back to $20,000 or $30,000 after rising much too fast in a short period of time.

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