throwawayqwer's comments

So shouldn't they only require Coinbase hand over "material transactions"?

Say someone bought Bitcoins from Coinbase and transferred them to their own wallet outside of Coinbase. They haven't sold them, so there's no taxes to pay and nothing to report to the IRS, right?

How is the IRS going to know the difference between that situation, where they have done nothing wrong, and someone who sold them outside of Coinbase and didn't pay taxes on it?

Are they just going to audit everyone over some threshold, or are they going to use this information in existing investigations (or in conjunction with other red flags)