Photo of Professionals at Bomar Law Firm

Guiding You Through The Legal Process

Photo of Professionals at Bomar Law Firm

IRS wins legal battle with Coinbase

On Behalf of | Dec 13, 2017 | IRS Issues

Georgia residents may have heard about the crypto-currency called Bitcoin. Even if they haven’t heard of it, the IRS certainly has, and the organization has won a court order to get the identities of those who own 14,355 accounts at Coinbase. Those accounts have accounted for roughly 9 million transactions between 2013 and 2015. A federal court judge ordered the information to be turned over in a ruling made on Nov. 28.

While the IRS initially wanted sensitive information related to 1 million customers, it eventually decided to only get information about those who had conducted transactions that involved $20,000 or more of the currency. In the ruling, it was determined that the narrow search was valid in pursuing those who may have avoided paying federal taxes on profits from such transactions. The government began its pursuit of Bitcoin users after discovering that few had declared losses or gains in 2015.

Coinbase said in a statement that it was happy to have at least narrowed the scope of the IRS requirements even if the government won the case. There is a possibility that the IRS will pursue accounts held with other companies as the price of Bitcoin increases over time.

Those who fail to pay federal taxes may face a variety of consequences. Consequences may include assets being seized, a tax lien or a possible prison sentence. An attorney may be able to help a person work out their issues with the IRS by asking questions about an audit on their behalf. They may also negotiate a settlement with the IRS on a taxpayer’s behalf. This might make it easier for a person to resolve a tax matter favorably.