Undeclared – Only 800 Per Year Declare Bitcoin Earnings!
The IRS has released data revealing that only 800 people mentioned Bitcoin in their earnings declaration in 2015!
This has come from research following an enforcement that is demanding Coinbase to provide transactional data of its users from 2013–2015. During that particular timespan, Bitcoin’s consumer price has been from the small teens to the thousands of dollars!
In reality the IRS may never know the total number of people that profited from Bitcoin’s volatility or the amount of profit that has been taken from the highlighted period above.
Coinbase Vs. IRS!
As the IRS is dedicated to obtaining as much data on digital currency transactions as possible. Coinbase is a ripe target, as the San Francisco-based exchange is one of the most popular in the world, and it is especially popular amongst North American and European users.
Coinbase was always an obvious target for the Internal Revenue Service, which requested the data of every Coinbase user account and their transactions.
Although the majority of summons enforcement cases are usually won, the Coinbase community hasn’t taken this so lightly. Users had attempted to halt the enforcement by accusing the IRS of breaching and threatening users’ privacy.
During the legal battle, the Internal Revenue Service has been described as unreasonable, with users mentioning that the agency would not attempt to enforce data sharing from other companies, such as banks or PayPal.
Do Users Still Store Bitcoin on Coinbase?
With a huge number of users, there seems to be no shortage of buyers and sellers for Bitcoin on Coinbase. During the Bitcoin ETF being rejected, Coinbase crashed due to high volume, which shows that the popularity is as strong as ever, regardless of the lawsuit drama.
With that being said, some users who are aware of the lawsuit may be more careful with where they buy/sell their Bitcoin and where they store it for long periods of time.
Privacy-Based Coin Popularity Making the Government Desperate for Data?
As governments try to regulate activity and enforce data submissions, users are seeking more anonymous currencies to transact with. Rather than storing Bitcoin on exchanges, such as Coinbase, cold/offline devices or paper wallet capabilities are becoming increasingly popular as well.
On the bright side, cryptocurrencies are now being taken seriously by governments, which shows that there is a possibility of it becoming mainstream, though in a regulated fashion. If the crypto space was deemed illegal, most exchanges would have been shut down already.
However, other privacy-based coins, such as Monero, have gained the attention of the FBI itself, with statements suggesting that Monero could be difficult to work with if it continues to gain popularity. Monero is 100% private and reveals no information about the sender or the receiver.
Since late 2016, Monero was made a payment option on the Dark Web market known as Alpha Bay. This caused Monero’s consumer price to skyrocket, as its volume increased from higher usage.
Coins like this could explain the lack of tolerance shown by the IRS with its lawsuit against Coinbase, as they literally have no other way of obtaining data other than forcing exchanges to reveal precious information about users.
What is the real reason behind such zero-tolerance methods of obtaining people’s private information regarding their cryptocurrency?
Is it to weed out criminals using the Dark Web markets and seize some of the profits people haven’t declared, or a chance to seize the data of the public and see who is using cryptocurrency…?