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The tax law firm of David W. Klasing, a California boutique tax firm, has issued a public statement warning investors that the US Internal Revenue Service is getting serious with Coinbase users.
The company’s dual-licensed tax attorneys and capital indemnity specialists say they have been monitoring an increase in IRS enforcement activity against Coinbase users who fail to meet their tax and reporting requirements.
Tax evaders may “end up facing serious civil and criminal problems across the board,” the company warned in its November 11 press release, adding:
“If you have not reported holding Bitcoin or other virtual currencies on your past returns or presented an incomplete or misleading picture of your cryptocurrency holdings, the time to take action to correct it is now. Once a tax audit or investigation has begun, it will be too late to change your statements or take advantage of a voluntary disclosure program. “
Coinbase released a transparency report this October, which the law firm said should “serve as an important wake-up call” for users of the exchange. That report clearly showed that both the IRS and its Criminal Investigation Unit, as well as the FBI and CIA, were submitting inquiries to the exchange.
Increased IRS enforcement activity against tax evading Coinbase users would appear to confirm that the exchange is working closely with federal authorities. As the company notes:
“These data [in the October report] clarifies that the IRS is requesting information from Coinbase with the express purpose of verifying it against its tax data and looking for discrepancies where holdings on Coinbase have not been reported in taxpayers’ statements.
As previously reported, US courts have so far confirmed the IRS’s authority to summon complete data and financial records as part of their investigations into the tax liabilities of individual Coinbase users.
