Categories: CryptoNews

US Government Files Stern Response to Ongoing IRS-Coinbase Case

Not too long ago, the Bitcoin world learned of an ongoing court case involving the IRS and Coinbase. The US government agency sought to pull data from Coinbase users to ensure no one evaded taxes. Since this request was made, there have been a few updates on the matter, though Coinbase has not handed over any information to date. Earlier this week, the US government issued an official response related to this ongoing debacle.

US Government Won’t Change its Opinion

It is good to see the IRS-Coinbase court case remain ongoing. Some Bitcoin enthusiasts would rather see this matter ended once and for all, but that will not be happening anytime soon. Coinbase should be commended for its refusal to give up the information requested by the IRS. The demand for customer records has been a topic of substantial debate among cryptocurrency users for several months now. There is still no end in sight for this particular case either.

It seems the US government has suddenly decided to issue a response on this ongoing matter. The IRS summons initially issued to Coinbase has been somewhat controversial since day one. Demanding customer records between January 1, 2013, and December 31, 2015 is not out of the ordinary. However, lacking any specific explanation as to why these records are needed or the reason for which the IRS issued the summons, it was clear there would be some backlash sooner or later.

That pushback ultimately came from “John Doe 4”, who intervened in July of this year. Though the IRS summons has been publicly opposed for some time now, very little had been heard regarding the matter until a few days ago. The new comments issued by the US government are nothing out of the ordinary. They validate the IRS summons by referring to its ongoing investigation of cryptocurrencies. They cite a 2013 report claiming how “some taxpayers may use virtual currencies to evade taxes.”

The US government admits targeting Coinbase because of its popularity and growth. One IRS senior revenue agent claims the company was offering buy and sell trading functionality in dozens of countries, maintaining nearly 5 million wallets and offering wallet services in 190 countries. All of this information was taken from the website of Coinbase, which has always been rather transparent about the growth of the business. It appears this public information caused the IRS’s decision to investigate the company and its customers.

On paper, this explanation makes a lot of sense. However, the IRS claims there is a scope of records in which it is particularly interested. Its first request in the summons was rather broad and vague, which allowed for speculation to run rampant. Now that the search has been narrowed somewhat, the government agency still hopes to obtain the information it seeks. Additionally, the US government claims its “fishing expedition” involving Coinbase is not improper by any means. Opinions will always remain divided on that front, though.

Additionally, the US government commented that enforcing the summons would not introduce undue regulation for the Bitcoin sector. It also stated that Coinbase users have no constitutionally protected reasonable expectation of privacy related to the account information held by the company. Both of those statements are difficult to argue with, although it is expected there will be some form of official response from the affected parties in the coming weeks. This is not the last we have heard of the IRS-Coinbase debacle.

Image(s): Shutterstock.com

JP Buntinx

JP Buntinx is a FinTech and Bitcoin enthusiast living in Belgium. His passion for finance and technology made him one of the world's leading freelance Bitcoin writers, and he aims to achieve the same level of respect in the FinTech sector.

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  • There is only one thing politicians want more than a person's vote and that's all their money. Send it in, peasant!!

  • The government can go F**K itself. They have no rights except those allowed by the people and the people say get f***ed. All governments are fascist institutions often posing as democracies, completely undeserving of respect and or obedience and anyone who claims otherwise should be sent to guantanamo and waterboarded till they come to their senses. I will bow down to no ruler unless they put a gun to my head in which case they should be prepared to have the favor returned immediately.

    • LOL @ hating government and wanting to be free, but wanting to use Guantanamo (a government-sponsored entity) as a reeducation camp.

  • Why are you referring to the IRS as a government agency? The IRS is a private corporation. Nothing more than a collection agency for the Federal Reserve (also a private corporation). I would have thought that most people in this space would know this.

    • They are a government created organization, wielding the power of physical force. They are not private; they exist because of government decree, and can seize property through coercive means- something no private corporation can do.

      • i have heard of numerous people trying to find the Law that creates the IRS -- so far i know or no one who has found it !!! i have heard Directors of the IRS claim Income Tax is Voluntary // i have also heard that the supreme court has ruled twice that W-2's are Not taxable Income // Only more confusion !!!!!!!

  • This is very similar to the corrupt scumbag NYC AG Schneiderman doing a fishing expedition to nyc residents who listed their homes on airbnb. It was thrown out initially as they have no right getting customers info. They then were forced to give the scumbags anonymous info of their users, but no contact information. Then scumbags were granted I request x amount of users, they targeted the top 25 revenue earners each time. The Govt is corrupt and only care about taking your money. The harder they push, the higher value bitcoin will have. Although it's not backed by anything (like the Euro), I don't think it will crumble or bubble burst because bitcoin owners (talking about the ones with a lot) will only hurt themselves by selling and cashing in high amounts. This, is why this currency system will 'keep itself honest' and flourish as more and more Govts are totally afraid! Keep buying folks, screw the ones who have screwed us our entire lives..

  • Coinbase needs to move its business to a country that won't make demands on it. This is very similar to the online Gambling Casinos moving outside the US. The US only has jurisdiction on its citizens. ...Actively seeking a non- US Exchange... ;-)

  • The IRS is a PRIVATE Corporation , every dollar collected goes to the Central Bankers [Federal Reserve another Private Corporation Banking Cartel , at $160 million per hour] not the US Government // the curious thing is that NO One can find the Law that creates there existence // i am completely confused ???????

    • no your right, as long as they have a frontman to redirect and a court system to bog down they will continue. it is strange that Lincoln and Kennedy both understood the rackit, oh forgot.

    • In 1913, the Sixteenth Amendment to the U.S. Constitution was ratified authorizing Congress to impose a tax on income, and the Bureau of Internal Revenue was established. In the 1950s, the agency was renamed the Internal Revenue Service. How is this hard to find? Do you really think the government can function without income tax?

      • the IRS is a private company -- and every dollar collected goes to the Central Bankers ,, not 1 penny goes to the government -- right now that figure is $126,000,000 [million] dollars collected Per Hour

          • In regards to the governments stern warning -- who Exactly Gave The Response as what person --- Buildings and Government Agencies are incapable of Speech -- so i ask again who gave the stern responce ?????????

          • You are A Troll -- always using sarcasm instead of fact -- if you are anywhere near Raleigh NC come on over and fix my tin foil hat -- Coward

          • Coward? Did you pay taxes last year even though you don't think it's constitutionally required? That sir, makes you the coward. And where are your facts?

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JP Buntinx
Tags: bitcoincoinbaseirsprivacy

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