Court orders Coinbase to share thousands of users info. with IRS

Bitcoin
The IRS wants to know about bitcoin holdings.

Fort Lauderdale accountants‘ clients could have a new worry, if they have bitcoin holdings. A federal court in California has ordered Coinbase to turn over to the IRS identifying records for clients who had more than $20,000 in bitcoin pass through their accounts this year.

According to the Verge, the bitcoin exchange estimates 14,355 users meet the government’s requirements.

The Verge reports:

For each account, the company has been asked to provide the IRS with the user’s name, birth date, address, and taxpayer ID, along with records of all account activity and any associated account statements. The result is both a definitive link to the user’s identity and a comprehensive record of everything they’ve done with their Coinbase account, including other accounts to which they’ve sent money.

The order is significantly narrower than the IRS’s initial request, which asked for records on every single Coinbase account over the same period. That request would also have required all communications between Coinbase and the user, a measure the judge found unnecessarily comprehensive.

The government made no claim of suspicion against individual users, but instead argued that the order was justified based on the discrepancy between Coinbase users and US citizens reporting Bitcoin gains to the IRS. Coinbase boasts nearly 6 million customers, but according to a government filing, fewer than 1,000 US citizens have reported cryptocurrency holdings on their taxes.

Sterling Accounting can help with any tax preparation needs its clients have. The Fort Lauderdale accountants write:

We provide innovative solutions for tax issues to minimize your tax liability, we find deductions commonly overlooked, and we stay up-to-date and well informed on all tax laws and legislation. It’s good to also remember that tax season comes around once every year, so good planning throughout the year is important to mitigating your tax exposure, allowing you to keep ore of what you earn! It’s a delicate balance that exists between optimizing your after-tax income and minimizing your pre-tax dollars. We offer advice on both short-term and long-term tax strategies, initiatives and investments. Our tax service is designed exclusively to help you maximize your earning power!

Sterling Tax and Accounting Services are specialists in handling all forms of tax matters for small, medium and large businesses of all kinds. We also help businesses identify often overlooked tax deductions.

 

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