It was recently reported that the IRS filed a petition in US federal court seeking full disclosure of Coinbase’s American customers records over just two alleged cases of tax avoidance by users of the bitcoin exchange. The summons came shortly after the Treasury Department’s inspector general issued a report chastising the IRS for not taking more aggressive action to curb “unlawful activities by those who use virtual currencies.”
While there are still so many discrepancies about how best to identify Bitcoin and how cryptocurrency gains and losses should be recorded and filed during tax time, more questions remain. How best can users follow such underdeveloped guidelines without getting into trouble? What potential solution could support those who have acquired a substantial amount of Bitcoin and want to prevent undergoing a tax evasion?
We turned to an expert in the field with long cryptocurrency experience and who’s company is working on a solution to get his take on the matter. Computer Engineer Perry Woodin is the CEO of Node40 – an incentivized infrastructure service that provides financial insight for cryptocurrency consumers. He identifies the problems with the current system which led to users being investigated and poses a two-fold solution to