Attention Coinbase customers: The IRS may soon know you purchased Bitcoin

IRS asks Coinbase for names of ALL customers who have used Bitcoin

The Internal Revenue Service is on the hunt for people who used Bitcoin to evade taxes.
The tax agency sent a broad request on Thursday to Coinbase, the largest Bitcoin exchange in the United States, asking for the records of all customers who bought virtual currency from the company from 2013 to 2015.

The document, a so-called John Doe summons, said that an I.R.S. agent recently found three cases in which people were using Bitcoin to evade taxes — two of which involved Coinbase customers.
The I.R.S. said that those findings — and Bitcoin’s relatively high level of anonymity — have led the agency to think that many more people are using the virtual currency for similar purposes.

“The I.R.S. not only has suspicion that the John Doe class includes U.S. taxpayers who are not complying with the law — it knows that the class in the past included such violators, and very likely includes others,” the document says.

Source: http://www.nytimes.com/2016/11/19/business/dealbook/irs-is-seeking-tax-evaders-who-use-bitcoin.html

IRS Guidance on Bitcoin purchases:

Best way to cash out btc without raising tax issues?
 

MindlessWork

Member
AnabolicLab.com Supporter
Ouch. Another nail in Bitcoin's coffin it seems. Now other governments may also make such requests to Coinbase or Circle to search for potential tax evaders . Possibly in the future all Bitcoin exchanges may need to register with IRS and also possibly withhold funds from purchasers as potential taxes.

What a slippery slope. Bet offshore exchanges that accept orders from US citizens might no longer accept orders in order to sidestep the IRS.
 

MindlessWork

Member
AnabolicLab.com Supporter
Yes, but it's not necessarily a reason to avoid it. For example, government has substantially increased its attention on things like encryption and TOR but that doesn't mean people should avoid.
You are right and that means people who use things like Bitcoin, TOR and encryption need to be smart to outsmart the government.
 

Gnarkill

Member
You are right and that means people who use things like Bitcoin, TOR and encryption need to be smart to outsmart the government.

I think I'm all good with the bitcoin thing. I think I'm grandfathered in cause now when you download it they say a copy of photo ID I just tried hooking my buddy up with a account then seen that and was like fuck that shit man. When I made my account they didn't ask for shit
 

MindlessWork

Member
AnabolicLab.com Supporter
I think I'm all good with the bitcoin thing. I think I'm grandfathered in cause now when you download it they say a copy of photo ID I just tried hooking my buddy up with a account then seen that and was like fuck that shit man. When I made my account they didn't ask for shit
However once the government starts sniffing around you should still be careful how you structure your bitcoin buys/sells and purchases that you make with your bitcoins. When they need info about people who didn't provide it in the beginning don't be surprised if Coinbase asks you for identification one day.
 

Gnarkill

Member
However once the government starts sniffing around you should still be careful how you structure your bitcoin buys/sells and purchases that you make with your bitcoins. When they need info about people who didn't provide it in the beginning don't be surprised if Coinbase asks you for identification one day.

When that day comes it's back to western lol
 

Gnarkill

Member
Cash in mail is actually safer than writing a check to your source (and no smart source would accept a personal check or even a money order from a customer). Checks and money orders ARE traceable.

So yes I feel your pain.

You are a smart man hope it doesn't get to out of hand I wish the goverment would just take a small pay off to get the fuck out go bust some heroine dealers
 

mjf

Member
I received an email a couple weeks ago or so stating that coinbase had to cancel my account. I don't remember the exact reason as I didn't have any money sitting in there and I just figured I'd open a different bitcoin acct when needed. Anyone else receive anything like that?
 

Rupling

Junior Member
Don't any of you use Localbitcoins.com and make anonymous cash deposits at local banks of your choosing....very easy, quick, no additional fees like WU/MG and no need to show ID (unless using Chase).
 
Coinbase has promised to fight the government's request and the court order to turn over customer data"

David Farmer, a Coinbase spokesman, told Ars that the company plans to fight the order in court. The government's request so far has been ex parte, or one-sided—Coinbase has not been formally invited to court to challenge the IRS. “We are aware of, and expected, the Court’s ex parte order today,” the company said in a statement provided by Farmer on Wednesday afternoon. “We look forward to opposing the DOJ’s request in court after Coinbase is served with a subpoena. As we previously stated, we remain concerned with our US customers’ legitimate privacy rights in the face of the government’s sweeping request.”

A case management conference has been scheduled for February 16, 2017 at 1:30pm PT.

Source: Judge forces Coinbase to hand over years’ worth of user data to IRS
 

flenser

Member
AnabolicLab.com Supporter
I can't figure out why this hasn't been getting more attention on the financial forums I follow. It's not exactly unexpected, but Coinbase is super convenient. I'm a very small fish on those forums, but I know some of those guys are regularly moving the kind of funds with BTC that would attract IRS attention. Makes me wonder how they are converting currencies.
 

MindlessWork

Member
AnabolicLab.com Supporter
I can't figure out why this hasn't been getting more attention on the financial forums I follow. It's not exactly unexpected, but Coinbase is super convenient. I'm a very small fish on those forums, but I know some of those guys are regularly moving the kind of funds with BTC that would attract IRS attention. Makes me wonder how they are converting currencies.
Maybe using offshore exchanges?
 

flenser

Member
AnabolicLab.com Supporter
Maybe using offshore exchanges?

Yea, that would be the ultimate destination. But how do they initially convert onshore funds to BTC? I have asked, but the responses I get resemble a parent talking to a foolish child asking too many questions.
 

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