On Friday 23rd, Crypto exchange Coinbase notified approximately 13,000 of its customers who are subject to the IRS Summons that the company must hand over information specific to their accounts. Coinbase expects to deliver the required documentation within the next three weeks.
The IRS considers cryptocurrencies such as bitcoin as property for federal tax purposes, meaning any profits or losses from the sale or exchange of the virtual coins should generally be reported as capital gains or losses, Reuters reported.
Bitcoin evangelist Andreas Antonopoulos was among the 13,000 accounts that will be turned over.
Received notice from Coinbase today, that my 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. In case you were wondering, I've filed & paid taxes for my bitcoin income, gains/losses.
— Andreas M. Antonopoulos (@aantonop) February 23, 2018
For customers who have paid taxes on their cryptocurrency gains, there’s nothing to worry about. Those customers who did not report their gains might be subject to back taxes.
The exchange said the information it is required to provide within 21 days includes ID, name, birth date, address, and transaction records from 2013-2015.
Coinbase told customers:
“We remind all our customers, that you have a responsibility to self-report and pay taxes on all taxable gains,”
The IRS initially requested information on all Coinbase users, but the number was reduced to 13,000 by a court order in November. The California court order said the IRS has the right to identify people, who bought, sold, sent, or received more than $20,000 through their Coinbase accounts in a single year during the three-year period. The IRS had initially targeted over 500,000 users in its court filing.