A judge’s ruling in favor of the U.S. Internal Revenue Service in its suit against Coinbase, a cryptocurrency exchange, once again proves that death and taxes are about the only certain things in life.
A federal court on Wednesday ordered Coinbase to report all transactions worth $20,000 or more between 2013 and 2015. The IRS took Coinbase to court when the latter refused to turn over the information voluntarily when requested.
Bitcoin prices BTCUSD, +8.32% rose from about $1,000 in January to above $11,000 on Tuesday, appreciating more than 10-fold. On Thursday, bitcoin fell to trade at $9,730.
Some analysts say that it is this massive appreciation in price that prompted the IRS to look into taxing gains from bitcoin trading.
The IRS alleged that bitcoin traders are not disclosing gains from trading in the cryptocurrency. According to the court documents, the IRS said that only a tiny fraction of hundreds of thousands of Coinbase users, or about 900, reported gains or losses from bitcoin trades, prompting the agency to request user data.
The judgment says that Coinbase must turn over information, such as taxpayer IDs, names, birth dates, addresses and transactions of the customers that fall within the IRS’s search parameters.
Coinbase fought this issue on the grounds that it violates financial privacy of its customers and claimed partial victory, in a blog post, saying that only about 14,000 users, a small percentage of its customer base, will be impacted by the order…
Read Full: Uncle Sam is coming after your bitcoin gains