The U.S. Internal Revenue Service has asked a court in California to order Coinbase, a Bitcoin exchange, to hand over the identities of active U.S. users of its service from the beginning of 2013 to the end of 2015.
In a filing Thursday to the U.S. District Court in San Francisco, the IRS said it’s investigating whether virtual currency users failed to report income on transactions conducted in the Bitcoin virtual currency. It’s targeting Bitcoin because it’s the most commonly used of a number of digital currencies.
“Because the IRS considers virtual currencies to be property, United States taxpayers can realize a taxable gain from buying, selling, or trading in virtual currencies. There is a likelihood that United States taxpayers are failing to properly determine and report any taxable gain from such transactions,” it argued.