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Coinbase Ordered To Report 14,355 Users To the IRS (theverge.com)
Nearly a year after the case was initially filed, Coinbase has been ordered to turn over identifying records for all users who have bought, sold, sent, or received more than $20,000 through their accounts in a single year. The digital asset broker estimates that 14,355 users meet the government's requirements. The Verge reports: For each account, the company has been asked to provide the IRS with the user's name, birth date, address, and taxpayer ID, along with records of all account activity and any associated account statements. The result is both a definitive link to the user's identity and a comprehensive record of everything they've done with their Coinbase account, including other accounts to which they've sent money. The order is significantly narrower than the IRS's initial request, which asked for records on every single Coinbase user over the same period. That request would also have required all communications between Coinbase and the user, a measure the judge ultimately found unnecessarily comprehensive. The government made no claim of suspicion against individual users, but instead argued that the order was justified based on the discrepancy between Coinbase users and U.S. citizens reporting Bitcoin gains to the IRS.
They told me cryptocurrencies were anonymous :^)
Make ONE association of a transaction to an individual, and then you have ALL transactions that individual has ever made, all recorded. It won't just be a single year that can be checked, it will be all years, from any source. The fatal flaw of blockchain is that all transactions are 100% traceable, and each transaction uses an identifer that is unque - and consistent - to a single user. Crack that association once - and it's cracked for all time, past, present and future. Cash is still anonymous ...
Browsing at +1 - no ACs, I ignore their posts. So refreshing!
It's the IRS, lol. Those miners about to be taxed, hope they didn't spend it all - they might need some of it + penalties.
Unless they:
:-)
- Recorded the closing bitcoin price on the day they received mining proceeds. (basis)
- Recorded the sale price of the bitcoins on the day(s) they sold them. (gain/loss)
- Recorded the power consumed during mining those coins and kept their power bill. (variable cost)
- Kept receipts for the mining hardware and the watt meter. (fixed costs)
- Reported the basis, gain/loss and expenses (costs) on their taxes.
If they did this they might not have any problems.
I signed up for a Kraken and Gdax (aka Coinbase) account lately and between the two I needed a live pic of my license, pic of me holding my driver's license, my social, my full name, a scan of my license, a pic of me holding my signature, etc. They comply with the banking secrecy act or they get shut down (like Tradehill). So because I had to give them all this, I report all my income in Quickbooks at my company where I run 4 giant mining rigs. So don't just assume all of us are tax evaders as most of us are not.
I thought transactions that are "Paid-In-Kind" are exempt. Money for money should not be taxed.
The IRS would argue that bitcoin is not money. It's no different than if you bought and sold gold coins for a monetary gain. You owe tax on the gains.
and the IRS jail you for cheating on your taxes!
That's no joke. The US Government considers cheating on taxes to be a very serious offense. In fact, the tough penalties for tax crimes are so well known that prosecutors sometimes elect to go after the tax charges, rather than other chargeable offenses, because the penalties are so much higher. There was a case in Las Vegas some years back where instead of busting a pimp for running prostitutes, which had a 2 year prison sentence, they prosecuted the guy for tax evasion because he didn't declare and pay taxes on his pimping income and he got 30 years for that instead. This wasn't an accident. The authorities didn't like the guy and wanted him off the streets, so they used the tax charges to put him away for a long time and didn't even bother with the pimping charges.