Cryptocurrency exchange Coinbase has informed 13,000 of its customers via a letter that it will be reporting their data to the US Internal Revenue Service (IRS).
In March of 2017, the IRS filed a case against Coinbase over unreported capital gains between the years 2013 and 2015. The IRS suspected a number of crypto accounts owners had evaded tax on over $20,000 transactions.
In July 2017, the IRS asked Coinbase for detailed information on every one of its then over 500,000 users in order to track those who cheat on taxes. However, a US court ruled in November that the total number would only include around 14,000 “high-transaction” users.
In an official notice on Friday, Conbase said that the number was further reduced to 13,000, in what Coinbase calls a “partial, but still significant, victory for Coinbase and its customers.” The company told affected customers that the exchange would be providing their taxpayer ID, name, birth date, address, and historical transaction records from 2013-2015 to the IRS within 21 days.
The letter also encourages customers to consult with an attorney if they have any questions. The FAQ on the exchange’s website says: “We remind all our customers, that you have a responsibility to self-report and pay taxes on all taxable gains. Please consult with your accountant or tax advisor to ensure that you file and pay taxes correctly.”
Bitcoin advocate Andreas Antonopoulos tweeted that he received a notice from Coinbase that his account is one of the 13,000 that they will have to turn over to the IRS under the court order.
“Not surprised, I knew I would be in that group,” said Antonopoulos. “In case you were wondering, I’ve filed & paid taxes for my bitcoin income, gains/losses.”
Earlier this month, Credit Karma, an American multinational personal finance company, released a study showing that out of 250,000 individuals who have already filed federal taxes this year through the company, less than 100 people reported a cryptocurrency transaction to US tax authorities. This is despite nearly 57 percent of the 2000 Americans surveyed by research firm Qualtrics last month saying they had realized some gains from cryptocurrencies.
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