CoinBase 1099 not matching transactions

I recently got a letter from the IRS saying there is an $80k difference between what the Coinbase 1099 total sales gross state and between the transaction that I reported in my tax return! So the IRS demanding that ill pay $10k additional tax +penalties!!
However in 2017 I started with $60k and my balance in the last day of 2017 was $37k which mean I lost $23k I tried contacting Coinbase to explain me how can the total gross sales in the 1099k is different from the total accumulated sales during 2017 that I downloaded from their report but never got an answer from CB any one here can help?

The only thing I can say is last year I sold more bitcoin than I bought. It was showing that I made money because of it. In no way did I make money last year on it. I know it’s not much help but that is my situation. I’m wondering if you did lots of trades and it makes it look like you have more money in there then you actually do/did. Hope you can figure something out.

I made over 3000 transactions in 2017

Generally speaking- what Coinbase reports is incorrect if you have other exchanges. Basis information doesn’t carry from exchange to exchange so if they don’t know what basis is in your crypto and will report it wrong on your tax return.

What I would do if I were you, redo your calculation with all of the exchanges, amend if necessary, but respond to their letter with your proof of calculations.

Now if you used Coinbase as the only exchange alone (you didn’t have any other exchanges) and your calculations are grossly different - I would contact Coinbase with your calculations and as them to review and maybe even reissue your 1099K

Either way- don’t ignore the IRS notice.

I only traded CB and I trued contacting them many times and got no respond!!


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