2017 has been quite the year for Bitcoin, and this week has been especially significant. The day after Bitcoin hit its highest trading value of $10,000 per coin, it was trading at $11,000 per coin. Quickly following the massive gains, the judge in a court case involving Bitcoin and the IRS released her ruling, and it was not the result many people were expecting.
At the beginning of the Bitcoin craze, some people discovered that it was a way to potentially hide money from the IRS. People would translate their cash into Bitcoin and then not report the revenue to the IRS. As time went on, and Bitcoin's value got stronger, it turns out that some Bitcoin owners were having some massive capitol gains, and also not reporting them to the IRS.
Obviously, after discovering the trick, the IRS requested from Coinbase, the largest Bitcoin trading platform in the US, information on its users transaction history. Coinbase refused, and the request inevitably ended up in court. This week, US Magistrate Judge Jacqueline Scott Corley ruled that Coinbase must turn over some of the requested records, but not all.
If you have ever had a year in which you have traded at least $20,000 worth of Bitcoin on the platform, the IRS is about to know. Hopefully, if you fall into this category, you are one of the three known tax filers who reported this information. If not, expect an IRS audit and possibly a tax evasion charge in your future.