Just got a notice from the IRS, I owe them $1.9 million dollars, lol. Coinbase assholes sent them a 1099-k saying I had 3.7 million in payment transactions. I wish it was 10% of that, talked to my accountant and we will send them docs to correct.
my coinbase 1099s have been some crazy numbers but thats not what the irs taxes you by, it just how much money has gone in and out of coinbase. that number is not the taxable amount its the total amount thats passed through. some is taxable, some not (ie they dont tax money you sent there, even though that number is included in the 1099). the irs gets a copy of that and i give a copy to my accountant also to send in with the rest of the paperwork.
to get the actual taxes owed i just import my coinbase (and other exchange) transactions into a crypto tax program and sent it all off to my accountant. so far not a peep from the irs.