The IRS Can Now Demand Coinbase’s User Data

A federal judge ruled on November 30 that the Internal Revenue Service (IRS) can summons information about users of the bitcoin exchange Coinbase.

The motion was granted in response to a request filed earlier in November in which the IRS alleged that some of Coinbase’s users may have been involved in tax evasion.

The court filing said that:

… that there is a reasonable basis for believing that such group or class of persons has failed or may have failed to comply with any provision of any internal revenue laws, and that the information sought to be obtained from the examination of the records or testimony (and the identities of the persons with respect to whose liability the summons is issued) are not readily available from other sources.”

In reply, Coinbase released the following statement:

We are aware of, and expected, the court’s ex parte order today. We look forward to opposing the DOJ’s request in court after Coinbase is served with a subpoena. As we previously stated, we remain concerned with our US customers’ legitimate privacy rights in the face of the government’s sweeping request.”

IRS commissioner John Koskinen and Principal Deputy Assistant Attorney General for the DOJ’s Tax Division, Caroline D. Ciraolo, both lauded the decision. Koskinen said that the summons for customer data “is a step designed to help the IRS ensure people doing business in the emerging economy are following the tax laws and meeting their responsibilities.”

Ciraolo said that it sends a “clear message to U.S. taxpayers that whatever form of currency they use – bitcoin or traditional dollars and cents – we will work to ensure that they are fully reporting their income and paying their fair share of taxes.”

According to Forbes, the IRS is requesting the following information about any U.S.-based Coinbase customer who transferred currency between December 31, 2013, and December 31, 2015: user profiles and preferences, security settings, payment and funding transfer methods and information, and all wallet or account activity, such as identifiying records of transactions, names and identifiers of parties to transactions, and all requests to send bitcoin.

The IRS previously released guidelines as to the applicability of pre-existing tax principles to virtual currency transactions.

+ posts

Share

Share on facebook
Facebook
Share on twitter
Twitter
Share on linkedin
LinkedIn
Share on email
Email

Subscribe to get the latest consumer news

More consumer News