IRS Fights to Learn Names of Coinbase Customers
The Internal Revenue Service (IRS) has taken an interest in Coinbase. Coinbase is a cryptocurrency company, specializing in this form of digital currency. The federal agency has requested the company release the names of its customers.
Why is the IRS interested in Coinbase’s customers? The agency contends that cryptocurrency users may not report their proceeds on sales of this currency. Such proceeds would classify as gains and taxes are likely due.
Will the IRS get this list? Coinbase has refused to provide the agency with a list of its customers. The IRS countered by suing for the information. A report in Bloomberg notes that the federal judge presiding over the case has allowed for the release of the names of customers that made a profit selling cryptocurrency but has also allowed for time for Coinbase to appeal the ruling.
What does this mean for investors? The case may impact those who partake in the cryptocurrency market. This is particularly true if they have realized gains from this investment.
This is just one of the many potential tax issues connected to the use of cryptocurrency. Since it is a relatively new form of currency, the IRS is still attempting to determine the best way to apply tax laws. Additional considerations, such as whether cryptocurrency through a foreign market should be reported as a foreign asset, remain unclear.
As such, those who are navigating this market are wise to seek legal counsel. An attorney can review your specific situation and help provide some guidance on the best options for tax compliance.
