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Author Topic: Coinbase Sends Form W-9 to send Form 1099-K if 200+ Transactions Are $20K+  (Read 2640 times)
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dmwardjr
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February 02, 2016, 06:13:23 AM
 #21

I spoke to the IRS earlier today.  They told me to provide my evidence to Coinbase via email and via USPS certified mail; to ask Coinbase to send a "corrected" form 1099-K and to keep copies of all correspondence with Coinbase.

So, we are about to see if Coinbase will cooperate with me and "correct" the form 1099K.  I purchased $35,000 worth of bitcoin via my Coinbase Wallet and USD transfers straight into Coinbase exchange during the month of December.  When I transferred $30,000 of that $35,000 back into my Coinbase wallet from the Coinbase Exchange, they reported it as a damn payment on the form 1099-K for the month of December.  THAT IS JUST FLAT OUT WRONG!  

They have me down as receiving over $87,000 in payments during 2015 when it should only be approximately $35,000 in payments.  They had also messed me up for the months of June, July, November and December.

I had purchased $16,000 worth of bitcoin via coinbase wallet through my bank in July and transferred it to the exchange.  I later transferred it out of the exchange back into my coinbase wallet then into another wallet for cold storage then back into coinbase wallet to withdraw and deposit back into my bank.  They counted all of those as damn payments.  Pisses me off.

We will see if they will be cooperative and "correct" this for me.  It may be a simple mistake.  It stresses me out to say the least.

Everyone will know soon enough if Coinbase wants the IRS to audit people [To no travail] or if they are willing to assist their customers with their mistakes made on important tax forms by correcting them.

I know one thing, if they are not cooperative, it shows they have no desire to have a good reputation with businesses like my own who wants to grow and do even more business with them.  If they do cooperate, I will be more than happy to take the time to explain how helpful they were in clearing up the misunderstanding.

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February 02, 2016, 06:20:27 AM
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I should be fine as long as you have to have both the $20,000 as well as the transactions.  I'm sure I did reach the transactions.  Just not the money.

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February 02, 2016, 07:45:05 AM
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I should be fine as long as you have to have both the $20,000 as well as the transactions.  I'm sure I did reach the transactions.  Just not the money.

Good, I'm happy to hear that.

I've learned a lesson in all of this:

Coinbase has no clue [If you use other wallets, such as Trezor, Blockchain.info, etc...] to store bitcoin for safe keeping.  When we send funds into those wallets from our Coinbase wallet for cold storage and later transfer them back to our Coinbase wallet to cash out to our Checking account, they will assume those are payments even though they are not.  So, it's best to keep your transactions with Coinbase each year below 200 transactions to avoid having to ask them for a "corrected" Form 1099-K.  You don't get a form 1099-K unless you reach 200+ transactions coming into Coinbase AND those 200+ transactions add up to more than $20,000.00.

Coinbase, is doing all businesses a good service by enabling us to convert bitcoin to FIAT and deposit it into our checking accounts.  I appreciate them doing this for the bitcoin community.  I only hope they are cooperative in working through misunderstandings about transactions.  It's impossible for Coinbase to know if bitcoin transferred into your Coinbase wallet was transferred from another wallet under our own control or from someone else in the form of a payment.  This why it is best to avoid putting Coinbase in the position to TRY to determine what transactions were actual payments and which were simple transfers from a wallet under our own control back into our Coinbase Wallet to cash out into FIAT.

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