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I am planning to provide an internet service that accepts payments through

  1. Bit coin
  2. PayPal
  3. Visa

For now, I have not legally registered this as a company or planning to pay tax for the income. Is it illegal to do this? And what do I need to do before starting to earn income?

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  • "Registering as a company" is generally not an issue, except in some municipalities who have aggressive views of what constitutes a business thus requiring a business license. You can do things for money, as long as you pay the relevant state and federal taxes (income and sales, depending on state).
    – user6726
    Aug 26, 2016 at 0:40
  • Which country? Having said that, the remarks by @user6726 will apply pretty much everywhere, mutatis mutandis. Apr 12 at 17:04
  • Depending on what your business does, you may need a specific license. E.g. if you are offering legal or medical advice, or operating a money transfer business. Apr 12 at 17:06

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It is illegal to not declare income to the IRS.

Self-employment tax rules apply to all income. Bitcoin is treated as property and is taxable.

https://www.irs.gov/uac/newsroom/irs-virtual-currency-guidance

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