The IRS Strikes Again!
In a twist that feels like a plotline ripped from a legal drama, Coinbase, the US-based cryptocurrency exchange and wallet service, is facing off against the Internal Revenue Service (IRS). On February 23, the exchange notified about 13,000 customers that their sensitive data is on the way to the IRS. Fear not, it’s not as juicy as it sounds, but it’s certainly sending shivers down the spines of those affected.
From Hundreds of Thousands to a Select Few
The saga began when the IRS issued a summons back in July 2017, seeking information from Coinbase on every one of its then 500,000 users. Yup, that’s right! Imagine the IRS throwing a spa party, inviting everyone to the cryptocurrency fun. However, reality hit hard—a court narrowed the focus to around 14,000 “high-transacting” users. Coinbase proudly reports it’s down to about 13,000, calling this a partial victory. Let’s face it: losing the battle but winning the war feels like the theme song for this entire incident.
What’s Going to the IRS?
For those 13,000 lucky recipients, the IRS will be receiving full taxpayer IDs, names, birth dates, addresses, and historical transaction records spanning from 2013 to 2015. Think of it as an unwanted surprise birthday party where everyone you’ve ever transacted with in cryptocurrency is invited. The timeline for this compliance? Coinbase plans on delivering the required information in about 21 days. Blink twice and your data is done!
Seeking Guidance: Legal Advice Suggestions
Coinbase isn’t leaving these affected customers in the lurch. Their letter included a gentle nudge to “seek legal advice from an attorney promptly.” This is a nice way of saying, “We can’t help you with your personal issues, but hey, lawyers sure can!” To further ease the storm, it also points to their Taxes FAQ for some comforting reading material. Who doesn’t love some good old tax talk during tax season?
Industry Insights and Tax Reporting Trends
In case you’re curious about the state of crypto tax reporting, let’s sprinkle in some data from Credit Karma. They revealed that only a mere 0.04 percent of their customers have reported cryptocurrencies on their federal tax returns this tax season. It’s clear the crypto community is either ignoring tax duties or has opted for a life of high-risk rebellion. Either way, the numbers hint at a collective game of tax hide-and-seek far larger than most would like to admit.
