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As regular readers may already know, our Bitcoin tax attorneys have been chronicling the ongoing legal battle between Coinbase, one of the world’s most prominent and widely-used cryptocurrency exchanges, and the Internal Revenue Service (IRS). In this long-running dispute’s latest development, Coinbase – which seems to be losing ground to the IRS, despite the company’s efforts to stem the investigative tide – has formally notified approximately 13,000 customers of its intent to turn over user data in compliance with court orders issued last year. This development is tangible proof that the IRS is successfully pushing forward with its sustained, aggressive campaign to increase the regulation of Bitcoin and other cryptocurrencies. For thousands of Bitcoin users, with more likely to join their ranks over the next several years, that could translate to very bad news.
For those who may be out of the loop regarding the Coinbase-IRS controversy, allow our tax attorneys to bring you up to speed with a quick timeline:
Despite some lulls in the timeline, time no longer appears to be on Coinbase’s side, nor that of its noncompliant users. On February 23, 2018, Coinbase posted a brief yet ominous announcement to its Support page, titled simply “IRS Notification,” stating the following:
“On February 23rd, 2018, Coinbase notified a group of approximately 13,000 customers concerning a summons from the IRS regarding their Coinbase accounts.
Please refer to this document for the court’s judgment. The court ordered Coinbase to provide taxpayer ID, name, birth date, address, and historical transaction records for certain higher-transacting customers during the 2013-2015 period.”
Despite being only about 300 words long, the aforementioned notification packs in a few major announcements – with significant legal implications for impacted users. Highlights of the notification, which can (and should) be read in full by following the “IRS Notification” link above, include the following:
For those who wish to explore this story in greater detail, our Orange County tax evasion lawyers would direct readers toward the following articles covering the Coinbase controversy, listed in chronological order below:
The following articles, which discuss various tax requirements pertaining to digital currencies, may also be of interest to our readers:
With thousands of records to analyze, it is going to take time – precisely how much remains uncertain – for the IRS to sift through this massive influx of Coinbase user data. However, that is not an excuse for Coinbase users to delay seeking legal counsel, a measure which Coinbase itself prudently recommends.
On the contrary, Coinbase customers should use this time to immediately obtain the services of a skilled and experienced tax attorney who is well-versed in, and up-to-date on, the complicated and continuously shifting regulations that surround virtual currency held domestically or abroad. To arrange a reduced-rate tax consultation concerning Bitcoin (BTC), Bitcoin Cash (BCH), Litecoin (LTC), or Ethereum (ETH) that you stored, sold, bought, or mined using Coinbase, or elsewhere, during 2013, 2014, or 2015, contact the Tax Law Office of David W. Klasing online using our submission form, or call (800) 681-1295 right away.
Also, we’ve expanded our offices! In addition to our offices in Irvine and Los Angeles, the Tax Law Offices of David W. Klasing now have offices in San Bernardino, Santa Barbara, Panorama City, and Oxnard! You can find information on all of our offices here.
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