Coinbase Customers Data will be handover to Internal Revenue Service (IRS).
One of the largest cryptocurrency exchange Coinbase will give data on 13 thousand of its customers to IRS. Coinbase expects to send the necessary documentation in the next 3 weeks.
The company sent this notice on February, 23. Coinbase warned that tax officials will be provided with information about the user’s name, date of birth, address, taxpayer ID and historical transaction records for 2013-2015.
Last year IRS requested Coinbase to provide them even more detailed date in order to catch those who cheated on their taxes.
Authorities suspect that some users have not paid taxes from crypto-currency transactions in the amount of 20 thousand dollars. The IRS required through the court access to the data of 500,000 users of the exchange. However, in November 2017, a California court ordered Coinbase to handover data of less than 15,000 users.
The cryptocurrency exchange said that the limitation of disclosure is an incomplete, but still significant, victory for Coinbase and its customers. Coinbase recommended clients “to seek legal advice from an attorney”.
The IRS claims that cryptocurrencies such as bitcoin or Ethereum as property for federal tax purposes. It means that any income or losses from the sale or exchange of the cryptocurrency should generally be reported as growth of capital or losses.
If cryptocurrency is held for less than a year it might be taxed at up to 40%.
Users have nothing to fear if they legally reported to the IRS.
According to Credit Karma company, less than 100 people out of 250.000 who filed federal taxes, reported about cryptocurrency transactions.
Previous Coinbase bad luck
The IRS’ request to handover Coinbase customers data is another bad luck for the exchange. Last year, it started get complaints on the U.S. Consumer Financial Protection Bureau’s website. Later, in February 2018, numerous customers of the Coinbase cryptocurrency exchange were complaining that exchange withdrew unauthorized money out of their accounts. Coinbase overcharges users and in some cases, this drained their linked bank accounts below zero, resulting in overdraft fees.
Meanwhile, Coinbase is making steps to prepare for the future. Company hired Tina Bhatnager, a former Twitter executive, to manage customer service and ready to increase the size of the support team to 500 in by the middle of 2018.