Why Bitcoin Buyers Don’t Need to Panic Over IRS Probe of Coinbase

BitsPlan

The Internal Revenue Service ordered the popular bitcoin exchange Coinbase to turn over millions of customer accounts this month, leaving many crypto-currencies collectors to worry just what the tax man has in store for them.

On its face, it looks like big trouble. The IRS request was a sweeping one as the agency asked for info about all of the Coinbase customers who bought bitcoin between 2013 and 2015, citing “suspicion [the group] includes U.S. taxpayers who are not complying with the law.”

Of course, some of these Coinbase users have nothing to worry about. For those who didn’t sell their bitcoins, there’s no capital gain and so nothing to pay. And those who declared their gain and paid the taxman are right as rain.

But what about those who bought a few bitcoins and sold them when the price went up? Or those who used their bitcoins to buy goods and services online? Some of these people may not be aware that because bitcoin is considered property not currency, every bitcoin purchase can amounts to a capital gains event.

In theory, the IRS pay soon demand back taxes and penalties from thousands or even millions of Coinbase customers—and then go

Read more ... source: TheBitcoinNews