Cryptocurrency exchange Coinbase has sent out emails notifying customers affected by the IRS summons that details specific to their accounts would be sent to the government agency.
The notifications which went out starting Friday 23, to about 13,000 is confirmation that Coinbase will fulfill the court order; the outcome of a legal battle with Internal Revenue Service (IRS).
The IRS had originally requested the details of about 500,000 in its summons to Coinbase in December 2016. However Coinbase challenged the IRS in court and in November last year, the court ruled that Coinbase should hand over information specific to 14,355 customers.
Part of Coinbase’s notification read:
[perfectpullquote align=”left” bordertop=”false” cite=”” link=”” color=”” class=”” size=””]“After a long process, the court issued an order that represents a partial, but still significant, victory for Coinbase and its customers: the order requires Coinbase to produce only certain limited categories of information from the accounts of approximately 13,000 customers. We are writing to let you know that the above-described court order requires us to produce information specific to your account.”[/perfectpullquote]
The information that the IRS will get from Coinbase was also restricted to taxpayer ID, name, birth date, address, account statements and transaction records for customers who transacted higher than $20,000 between 2013 and 2015.
Coinbase expects to submit the required information to IRS within the next three weeks. Customers who have reported their cryptocurrency gains and paid the taxes have no cause for worry while tax defaulters may be required to pay back taxes.
IRS requires cryptocurrency traders to report any profit each time they transfer bitcoins—whether it’s a sale or used to purchase goods/service. IRS also reserves the right to issue a summons when it wants to carry out a tax investigation. They don’t need to prove a probable cause before doing so. However, the summons can only be enforced by a court of competent jurisdiction.