IRS will limit Bitcoin audits on Coinbase customers

posted 5 months ago
The Internal Revenue Service suggested it will scale back a sweeping probe of more than a million customer accounts at the popular digital currency exchange Coinbase, saying it will no longer seek password and security settings for the accounts.

The concession came during a legal skirmish last week between the IRS and anonymous bitcoin buyers at Coinbase, who are asking for the right to intervene in the case.

"DOJ trial attorney Amy Matchison said at a court hearing before U.S. Magistrate Judge Jacqueline Scott Corley Thursday that the IRS has been in talks with Coinbase about narrowing its request to only items the agency would need to look for unreported income," reported The Recorder, a legal site that reported on the hearing.

The controversy began last year when the IRS demanded to see all of Coinbase's customer account activity from 2013 to 2015—a time when bitcoin's value soared from $13 to over $1,100 (it is currently worth around $2600). The agency has stated that only 802 people declared gains or losses related to bitcoin in 2015.
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