A Popular cryptocurrency exchange, Coinbase, has been forced by a US court order to hand over a list of 13,000 of it’s customers’ names and assorted personal information to the Internal Revenue Service (IRS) so that the IRS can determine who has been reporting their Crypto-Currency transactions and to tax and penalize those who have not.
The link to the original article is here;
Coinbase, a San Francisco-based cryptocurrency exchange notified thousands of customers, to provide the IRS with “taxpayer ID, name, birth date, address, and historical transaction records for certain higher-transacting customers during the 2013-2015 period.”
While 13,000 is a lot, if you have used Crypto-Currencies in the US, or in Canada, you might want to get filing, and fast.
Apparently, Coinbase received a summons from the IRS in late 2016 asking for a wide range of records relating to approximately 500,000 Coinbase customers. Coinbase fought this summons in court – not sure if they won and the 13,000 is the win or if that matter is still pending but the 13,000 is a different attempt by the IRS to gather information they are entitled to under the IRC.
Still shocking to us at inTAXicating is how few Canadian and US crypto enthusiasts had even bothered to address the tax issue.
Many on both sides of the border claims that both the IRS and the CRA have been really vague on how they plan to address Crypto-Currencies, however than cannot be further from the truth.
On March 25th, 2014, the IRS issuesd this release; https://www.irs.gov/newsroom/irs-virtual-currency-guidance; and
On March 17, 2015, the CRA issued a release about how the Canada Revenue Agency will be handing Crypto-Currencies and they have been on top of it with the most recent detailed release being January 18th, 2018.
Whether you believe in taxation or that taxation is theft – something brought in from the BNA Act of 1867, or there are privacy rights stemming from the 3rd Amendment in the US, the bottom line is this.
If you don’t report your interactions with these digital currencies, you are going to pay that tax plus penalties and interest. Why give the government more than they are asking for? Include the currencies on your tax return, pay the tax, and be fully compliant.
If you have failed to include your adventures in Crypto-Currencies on your tax returns, you are in trouble. You need to contact inTAXicating and we can assist you in filing your returns to reflect those amounts.
Remember, the CRA’s Voluntary Disclosure Program is changing as of March 1st, 2018. Once that loophile closes, it’s going to be very difficult to get a fair shake from the government.
Don’t wait, hoping there is going to be miracle court order or that the CRA or IRS will decide that they have enough taxes already.
inTAXicating can be reached at firstname.lastname@example.org to book an appointment.
Copy of Court Order;
There’s plenty of misinformation regarding tax preparation and how to report digital currencies, however the CRA and IRS have been very clear.
If you have transacted publicly on any centralized exchanges such as Coinbase and are US or Canadian residents – and regardless of your opinion on the morality of tax – the IRS and the CRA have courts on their side and they can sentence you to jail.