The appeal of cryptocurrency is that it exists in a seemingly parallel universe to the usual lurking grasp of federal regulators. But with the coins such as bitcoin skyrocketing to new highs of over $10,000 per coin, the U.S tax authority is starting to get a bit uppity about the whole Bitcoin boom prospect.
Which makes sense – I mean, citizens are getting rich, and they are not getting a dime – right?
Reportedly, on Wednesday, a judge in San Francisco made a ruling that Coinbase is liable to supply the IRS with the identification of members who have invested over $20,000 in annual transactions. The dates requested are specifically between 2013, and 2015.
What The Court Documents Stated As IRS’s Line Of Attack
“Coinbase itself admits that the Narrowed Summons requests information regarding 8.9 million Coinbase transactions and 14,335 Coinbase account holders. That only 800 to 900 taxpayers reported gains related to Bitcoin in each of the relevant years and that more than 14,000 Coinbase users have either bought, sold, sent, or received at least $20,000 worth of bitcoin in a given year suggests that many Coinbase users may not be reporting their bitcoin gains.” The court documents read.
Why This Is Such An Uproar In The Cryptocurrency World
The main perk of cryptocurrency is supposed relative decentralization and of course, privacy. Which is why those that are being revealed to the IRS are not too happy with their new predicament. Although, the good news is that Coinbase did gain some ground. They will still be submitting the information of Coinbase users, but a smaller category of higher-value users.
Those unlucky few who will be chosen to land on the IRS’s desk of growing concerns will have their following documents submitted by Coinbase, according to the document, “ID number, name, date of birth, address, transaction logs, and account statements.”