Does Coinbase report to the IRS? The tax reporting issue is a question that should be on the minds of anyone who bought cryptocurrency in 2021 regardless of where they bought, sold, or traded it. But not all crypto exchanges or platforms do business the same way. You may get all the required tax forms you need from an exchange, or you may get none at all.
The IRS warns taxpayers that not receiving the proper forms does not excuse you from filing your taxes including reporting gains, losses, and income related to crypto earnings.
Failing to disclose crypto capital gains, for example, can lead to an IRS audit depending on circumstances. It’s wise to read and heed the IRS rules currently in effect regarding crypto taxation. Ignorance of the law will not protect you.
What follows is not tax advice, and should be read as a primer so you can ask intelligent tax questions of a trained professional or the service provider (in this instance, Coinbase) about the current tax issues you may have to deal with.
Does Coinbase Report To The IRS?
The short answer is yes, according to the official site, Coinbase does report to the IRS via IRS Form 1099-MISC. It would be easy to believe the clickbait headlines you see about this form–some crypto blogs misleadingly refer to certain IRS forms as “crypto” tax forms when they are not.
You will read crypto blog headlines referring to a “Crypto 1099” when no such thing exists. IRS Form 1099 MISC is used to report “miscellaneous income” including that which may be earned via crypto. It is not a cryptocurrency-specific form and if you search the IRS official site, you will not find a form labeled “Crypto 1099”.
What To Know About IRS Form 1099-MISC
Coinbase submits IRS Form 1099-MISC to any U.S.-based cryptocurrency trader who earned more than $600 in crypto in the applicable tax year. A copy of this form is also submitted to the Internal Revenue Service.
IRS Form 1099-MISC does NOT report capital gains or capital losses, and if you earned more than $600 in crypto a year you are REQUIRED to submit your capital gains and losses to the IRS no matter if you got a 1099 or not.
You must do this using the IRS 8949 cryptocurrency tax form. Remember, Coinbase submits the 1099-MISC to both the taxpayer and to the government. Do not ignore the form when it arrives–you are required to submit this tax information according to IRS.gov.
What To Know About Coinbase Reporting To The IRS
The information presented here applies specifically to United States taxpayers. Non-U.S. Coinbase users will not receive tax forms from Coinbase. Overseas investors must exercise their own due diligence to comply with overseas tax law.
For U.S. taxpayers, be advised that Coinbase does not, at press time, issue ALL known IRS forms that could be associated with cryptocurrency taxable events. For example, you will NOT receive an IRS Form 1099-K (Merchant Card and Third Party Network Services), nor IRS Form 1099-B, Proceeds From Broker and Barter Exchange Transactions.
Furthermore, ONLY your “personal trading activity” at Coinbase is included in your 1099-MISC. Your crypto trades on non-Coinbase platforms are NOT represented by the Coinbase-issued 1099 and you may ALSO find that the reporting does not extend to all Coinbase options such as Coinbase Wallet, Coinbase Prime, etc.
You may well have “taxable events” related to crypto on other platforms. In such cases, you may be required to do your own due diligence to obtain and submit the required IRS forms. Unless you have been specifically promised a certain form by an exchange or network you have been using, don’t expect tax forms to arrive. You’ll need to do your own research.
What Happens If You Do Not Comply
Some may receive an IRS 1099-MISC from Coinbase and feel the temptation to simply ignore it. This can result in an IRS audit.
You may also be contacted by the IRS in an official manner if the information on your Coinbase account does not match what the IRS has in its taxpayer database. You are required to update the IRS or correct the record in such cases. Failure to respond may result in further attention from the federal government.
Do Other Crypto Exchanges Report To The IRS?
Yes. According to multiple sources, in addition to Coinbase, Coinbase Prime, and Coinbase Pro, the following cryptocurrency exchanges may also send IRS Form 1099-MISC:
- Celsius Network
- Gemini Earn
- Bitstamp Earn
Joe Wallace has covered real estate and financial topics, including crypto and NFTs since 1995. His work has appeared on Veteran.com, The Pentagon Channel, ABC and many print and online publications. Joe is a 13-year veteran of the United States Air Force and a former reporter for Air Force Television News.