The Coinbase John Doe summons by the IRS has been a source of quite a bit of controversy already. One customer filed an answer a few weeks ago, indicating his tactic to oppose the summons. Jeffrey K. Berns has not been successful in this regard thus far, but he has not given up yet. A new answer has been filed to prevent the IRS from identifying Bitcoin users on the exchange platform.
Another Counter In The Coinbase-IRS Debacle
When news broke about the IRS aiming to take a closer look at Coinbase users’ behavior between 2013 and 2015, the Bitcoin community reacted with mixed feelings. According to the IRS, there is a reason to believe some people used Coinbase to evade taxes and even launder small amounts of money. However, the government agency is not required to provide any proof to back up these claims when it comes to issuing a John Doe summons.
One Coinbase user, by the name of Jeffrey K. Berns, is not planning to go down without a fight. A few weeks ago, he filed a countermotion in an attempt to prevent this investigation from happening. His position as an attorney and Managing Partner of Berns Weis LLP puts him in the perfect position to shape the future of legislation affecting Bitcoin and other cryptocurrencies.
His first motion revolved around being allowed to participate in the legal process drew a reaction from the IRS. The bureau deemed he is no longer subject to the summons. In a way, this means his personal matters have been resolved, rendering his entire motion moot. But Berns is not satisfied by this decision, and filed a new motion this week.
Legal maneuvering is the bread and butter of attorneys, and Berns’ new reply aims to counter the IRS exempting him from the John Doe summons. His argument revolves around the IRS “artificially mooting his motion” because they are concerned over the court scrutinizing the bureau’s actions.
Moreover, Berns also argues the “misuse” of a John Doe summons by the government. He feels the IRS uses this tactic to evade inquiries regarding their motives for this investigation. So far, it remains unclear which basis can be used to defend the decision to investigate Coinbase users, particularly when it comes to tax evasion.
With the IRS exempting Berns from the John Doe summons inquiry, the government bureau has set a somewhat unusual precedent. However, this also seems to indicate this John Doe summons was put together hastily. It is rather unusual to see them exempt one person related to this investigation just because he filed a counter motion.
The new motion by Berns also mentions how he is willing to withdraw the initial motion if the Court reconsiders the John Doe summons approval. Protecting the rights of all Coinbase customers remains priority number one. If no further legal action is taken by either party, this motion will be heard in court on January 19, 2017.
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