Coinbase ordered to report 14,355 users to the IRS

0
150


Today, Coinbase suffered a major defeat at the hands of the Internal Revenue Service, nearly a year after the case was initially filed. A California federal court has ordered Coinbase to turn over identifying records for all users who have bought, sold, sent, or received more than $20,000 through their accounts in a single year. Coinbase estimates that 14,355 users meet the government’s requirements. The full order is embedded below.

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 user over the same period. That request would also have required all communications between Coinbase and the user, a measure the judge ultimately 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.

Still, it’s a major setback for the company, which had argued that the IRS order constituted an unjustified intrusion on user privacy. “We were proud to appear in court today… to continue to fight against what we believe to be government overreach,” Coinbase’s David Farmer wrote after a hearing earlier this month. “In the future we hope to work with the IRS to establish a reasonable tax reporting method that makes sense for virtual currency service providers and consumers alike.”

Coinbase did not immediately respond to a request for comment.



Source link

LEAVE A REPLY

Please enter your comment!
Please enter your name here