IRS Demands Identities of All US Coinbase Traders Over Three Year Period (vice.com)

An anonymous reader quotes a report from Motherboard: In bitcoin-related investigations, authorities will often follow the digital trail of an illegal transaction or suspicious user back to a specific account at a bitcoin trading company. From here, investigators will likely subpoena the company for records about that particular user, so they can then properly identify the person suspected of a crime. The Internal Revenue Service, however, has taken a different approach. Instead of asking for data relating to specific individuals suspected of a crime, it has demanded bitcoin trading site Coinbase to provide the identities of all of the firm's U.S. customers who made transactions over a three year period, because there is a chance they are avoiding paying taxes on their bitcoin reserves. Coinbase has a total of millions of customers. According to court filings, which were first flagged by financial blogger Zerohedge on Twitter, the IRS has launched an investigation to determine the correct amount of tax that those who use virtual currencies such as bitcoin are obligated to pay. But according to the documents, the IRS is asking for the identities of any U.S. Coinbase customer who transferred crypto-currency with the service between 2013 and 2015. "The John Does whose identities are sought by the summons are United States persons who, at any time during the period January 1, 2013, through December 31, 2015, conducted transactions in a convertible virtual currency," reads a memorandum written by Department of Justice attorneys and filed on Thursday, November 17.

Comments

Fishing Expedition

[gavron]

Coinbase should be able to get this quashed.

If the IRS had evidence of a crime, they're allowed to get information to further identify the person who committed it.

If Coinbase had committed a crime, they're allowed to get information as to who else was involved in it.

However, to subpoena a list of all clients in a certain geographical area over a three year period is to presume them guilty and then look for the innocent. That's a classic fishing expedition, and the courts should disallow it.

I am not a lawyer. Consult lawyers for legal advice. This is simple common sense.

E
P.S. I know the IRS is powerful... but not ALL powerful.

Re:Fishing Expedition

[Anonymous Coward]

You seem confused, you don't need evidence of a crime. With companies that deal as money exchanges they have a legal obligation to record the details of all financial transactions and those need to be made available to the government with a legal request, this doesn't actually require proof of crime with a tax investigation.

Morality

[Rockoon]

The left wants to raise taxes because they think it will increase tax revenue.
The right wants to lower taxes because they think it will increase tax revenue.

When the hell did it become moral for a government to maximize tax revenue?

Its down right evil.

Re:Morality

[LeftCoastThinker]

No, what is evil is running the federal government on a $10 trillion dollar deficit over the last 7 years that future generations will have to pay for in order to buy votes with social programs like health care, welfare and food stamps.

And to be clear, the right wants smaller, less intrusive government with minimal safety nets for those who truly have to have it. This means less taxes because the government is smaller. If that boost of 2-3% extra into the economy also increases the total economic growth rate dramatically, and therefore boosts net tax income (which happened under Regan), that's fine, but that is not the goal.

The left wants to tax everything to the max so that they can buy votes with their various failed social programs and experiments.

Re:Not the first time they've done this

[reanjr]

So, you systematically evaded taxes for 5 years, and that makes you angry at the government?