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At this point, nearly everyone has at least heard of Bitcoin. The intangible cryptocurrency has been making headlines recently for reaching an all-time high, soaring to over $11,000 per Bitcoin.
However, a recent decision out of the Federal District Court for the Northern District of California may have some crypto-investors concerned, as the IRS wants to get to know Bitcoin users in a way they're likely not going to like, and the court is giving the federal agency the go ahead. The Bitcoin exchange service, Coinbase, was just ordered to identify to the IRS the 14,000 plus users who have exchanged $20,000 or more worth of Bitcoin per year for 2014 and 2015.
While most of us learned that we have to declare the pennies on our eyes when we die, the IRS suspects that many Bitcoin investors have been ignoring their reporting duties. Which isn't surprising given the very nature and concept behind cryptocurrencies make them rather attractive to criminals (who are notoriously bad at paying taxes).
According to one report, the IRS only received 800 to 900 reports of gains related to Bitcoin over the years in question, when there were over 14,000 -- $20,000 plus transactions, leading to the obvious conclusion that some folks are not reporting their gains.
While Coinbase, the Bitcoin exchange company that facilitates transactions, has touted the court's order as a partial victory, from their statement, it appears that the company is seriously considering if an appeal is in any way possible at this point. However, it seems likely that many of Coinbase's biggest users will be named, and, if the IRS can, taxed.
Meeting with a lawyer can help you understand your options and how to best protect your rights. Visit our attorney directory to find a lawyer near you who can help.