What should you do if you had bitcoin at coinbase, and the IRS wants your trade history?
Many people have used Coinbase and other exchanges. You’re probably aware that the IRS has taken an interest in your activities. Many people believe that their Bitcoin is just a mere hobby which can’t result in tax implications. The reality is that most people have failed to account for capital gains, or other tax obligations, which could create penalties and fines. If you engaged in a scheme to avoid, or evade, income taxes, the penalties can be harsh.
Many people have heard that the IRS was trying to get account records from Coinbase. Many people think this will not happen. The fact is that the John Doe summons tactics have been used in the past, and succeeded. If the IRS send a John Doe summons, assume it’ll go through. If the IRS wants your bitcoin trade history, we recommend you speak to our attorneys.
In the past, when the IRS was proceeding against taxpayers, the John Doe Summons was the first step in discovering the accountholder’s real identity. In this instance, if the IRS wants your bitcoin trade history, it’s likely that Coinbase, or whichever exchange you used, will turn over the relevant information. In 2016, the federal courts granted the IRS’s request for Coinbases information.
What should I do if I have unpaid bitcoin tax
If you sold Bitcoin, or were paid for work performed in Bitcoin, you should get the guidance of a tax attorney. You should contact our tax lawyers if you’re worried about potential criminal tax implications. We can provide you with meaningful advice on a path forward.
We recommend you speak to us, because you are protected by the attorney-client privilege. If the IRS subpoenas your CPA, he/she has no such protection and will become a witness against you.
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