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.
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