Bitcoins Coinbase. The Northern California District Court judge allowed IRS, the revenue service of the United States federal government to cite Coinbase a bitcoin wallet service enterprise, this to set forth records of all transactions that took place from 2013 to 2015 due to the investigation into possible tax fraud committed by U.S. residents who use the California-based virtual currency exchange.
The Department of Justice made the request for a “John Doe” summon, which essentially identifies a person or ascertainable group by their performance in the platform. This procedure will be used to obtain information about possible violations of internal revenue laws from all those individuals who have used Coinbase, arguing this Caroline D. Ciraolo head of the Justice Department’s Tax Division, said “As the use of virtual currencies has grown exponentially, some questions have raised about tax compliance too”.
But Coinbase is not the only one that has been cited, the TIGTA (Treasury Inspector General for Tax Administration) called IRS because of their lax attitude at monitoring the transactions of digital currency. As specified by TIGTA, the agency (IRS) must improve their effort to address income streams produced via cryptocurrency.
In particularly the bitcoins are very risky, since taxable sales involving digital currencies may go undetected. In a statement for this investigation the IRS connoted “The taxpayers being investigated have not been or may not be complying with U.S. internal revenue laws requiring the reporting of taxable income from virtual currency transactions”
