An affidavit filed in San Francisco last week shows that only 802 US citizens declared any bitcoin incomes in 2015, despite the fact that US citizens are generally required to file tax returns regardless of where they live in the world.

The revelation of this improbably small number stokes fears that cryptocurrencies are not just a means for paying for troubling contraband but could potentially mainstream into tax evasion, a far more popular and costly crime to the US Treasury.

The affidavit has emerged in the US v Coinbase case in the US District Court. The IRS is seeking access to Coinbase’s customer records to ascertain whether people are failing to declare Bitcoin denominated incomes. Coinbase is contesting the action.

According to Coinbase Attorney Juan Suarez;

“Coinbase remains concerned with the indiscriminate and over broad scope of the government’s summons and we have produced no records under the summons”

Coinbase founder Brian Armstrong in January was defiant. He said;

“The IRS’s subpoena is overly broad and incorrectly implies that all users of virtual currency are evading taxes. Asking for detailed transaction information on so many people, simply for using digital currency, is a violation of their privacy, and is not the best way for us to accomplish our mutual objective. If the IRS were to approach Citibank, Fidelity, or Paypal and ask them to turn over all customer records, they would rightfully push back. And I feel we have the same obligation to do so.”

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