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Coinbase Loses Bid to Block U.S. Tax Probe of Bitcoin Gains
Source: Bloomberg
Coinbase Loses Bid to Block U.S. Tax Probe of Bitcoin Gains
By Joel Rosenblatt
November 29, 2017, 5:04 PM EST Updated on November 29, 2017, 7:21 PM EST
→ IRS sought information on as many as 14,355 customer accounts
→ ‘The government has sensed a windfall,’ CryptoCompare CEO says
Coinbase Inc. lost a bid to block an Internal Revenue Service investigation into whether some of the company’s customers haven’t reported their cryptocurrency gains.
U.S. Magistrate Judge Jacqueline Scott Corley in San Francisco ruled that the tax agency’s demand for information isn’t overly intrusive. The price of bitcoin has been soaring and crossed $10,000 Tuesday.
With just 800 to 900 taxpayers reporting bitcoin gains from 2013 through 2015 in a period when more than 14,000 Coinbase users have either bought, sold, sent or received at least $20,000 worth of bitcoin, “many Coinbase users may not be reporting their bitcoin gains,” she wrote. “The IRS has a legitimate interest in investigating these taxpayers.”
The company, one of the world’s largest virtual currency exchanges, has been sparring since last year with the IRS over its summons -- and continued to resist turning over the information even after the agency scaled back its request in July. Coinbase and industry trade groups contend the government’s concerns about tax fraud are unfounded and that its sweeping demand for information is a threat to privacy.
The company said it’s glad that the government and the court narrowed the scope of the summons.
-snip-
By Joel Rosenblatt
November 29, 2017, 5:04 PM EST Updated on November 29, 2017, 7:21 PM EST
→ IRS sought information on as many as 14,355 customer accounts
→ ‘The government has sensed a windfall,’ CryptoCompare CEO says
Coinbase Inc. lost a bid to block an Internal Revenue Service investigation into whether some of the company’s customers haven’t reported their cryptocurrency gains.
U.S. Magistrate Judge Jacqueline Scott Corley in San Francisco ruled that the tax agency’s demand for information isn’t overly intrusive. The price of bitcoin has been soaring and crossed $10,000 Tuesday.
With just 800 to 900 taxpayers reporting bitcoin gains from 2013 through 2015 in a period when more than 14,000 Coinbase users have either bought, sold, sent or received at least $20,000 worth of bitcoin, “many Coinbase users may not be reporting their bitcoin gains,” she wrote. “The IRS has a legitimate interest in investigating these taxpayers.”
The company, one of the world’s largest virtual currency exchanges, has been sparring since last year with the IRS over its summons -- and continued to resist turning over the information even after the agency scaled back its request in July. Coinbase and industry trade groups contend the government’s concerns about tax fraud are unfounded and that its sweeping demand for information is a threat to privacy.
The company said it’s glad that the government and the court narrowed the scope of the summons.
-snip-
Read more: https://www.bloomberg.com/news/articles/2017-11-29/coinbase-loses-bid-to-block-irs-probe-of-bitcoin-gains
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