Slashdot Mirror
Bitcoin Exchange Ordered To Give IRS Years of Data On Millions of Users (gizmodo.com)
Last month, instead of asking for data relating to specific individuals suspected of a crime, the Internal Revenue Service (IRS) demanded America's largest Bitcoin service, 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. On Wednesday, a federal judge authorized a summons requiring Coinbase to provide the IRS with those records. Gizmodo reports: Covering the identities and transaction histories of millions of customers, the request is believed to be the largest single attempt to identify tax evaders using virtual currency to date. As a so-called "John Doe" summons, the document targets a particular group or class of taxpayers -- rather than individuals -- the agency has a "reasonable basis" to believe may have broken the law. According to The New York Times, the IRS argued that two cases of tax evasion involving Coinbase combined with Bitcoin's "relatively high level of anonymity" serve as that basis. "There is no allegation in this suit that Coinbase has engaged in any wrongdoing in connection with its virtual currency exchange business," said the Justice Department on Wednesday. "Rather, the IRS uses John Doe summonses to obtain information about possible violations of internal revenue laws by individuals whose identities are unknown." In a statement, Coinbase vowed to fight the summons, which the company's head counsel has previously characterized as a "every, very broad" fishing expedition.
Prison Planet, USA.
What is the difference between this and the IRS asking for banks to release 3 years of all of its customers records, because cash is anonymous?
love is just extroverted narcissism
....cash should be used whenever possible.
As soon as Bitcoin entered common parlance, this became the obvious endgame.
As soon as you could purchase normal day-to-day goods, it became inevitable.
And as much as it sucks ... they're right. Using crypto currency does avoid taxes, even if that isn't the primary intent.
I just wish they'd found a better way to address the issue. A mass subpoena is rather inelegant, and will cause a lot of pushback.
This signature is false.
You have no idea what you are talking about.
Seriously... you don't know what you are talking about. The 18th amendment established prohibition against alcohol, and was utterly repealed by the 21st amendment, so technically it is the 18th amendment itself that is unconstitutional, not the IRS.
File under 'M' for 'Manic ranting'
If somebody had bitcoins, was smart to keep a blockchain in his own computer, and apply some common sense, this is not an issue.
If somebody opened account, provided name other information, then had to realize that their custodian is merely another type of bank, and all of the transactions will be subject to the scrutiny. Just like the regular old fashioned bank.
This is merely a way to scare bitcoin users.
Those who understand bitcoin have enough brain to maintain their anonymity.
The premise of your question is flawed. BitCoin transactions are NOT anonymous, they are actually tracked *forever* in the block chains which are public records. What's supposed to protect you is that your wallet (a set of Crypto Keys actually) is used to identify parties in a transaction. Where it may not be easy to match the wallet to the person (or entity) making the transaction, but once you do, you can find EVERY transaction made by that wallet from public information.
Those trading BitCoin (which is something impossible to physically trade) must do so electronically, which means you have to use some kind of exchange at some point in order to obtain something of value for your BitCoin (i.e. trade it for something else). It's these conversion transactions where the anonymous nature of those Coins really isn't so safe and one's identity can be revealed. Once you are identified as the owner of a wallet, then everything you've done falls out of the public record in the block chains.
Honestly, nobody knows what the fuck he would say.
Or whether or not he'd change his opinion the next day, depending on who he met with that night.
There are two types of people in the world: Those who crave closure
I hate it when they use his own words against him.
It makes them look so bad.
There are two types of people in the world: Those who crave closure
It is very likely that I don't understand enough about Bitcoin!
Question 1: Why would anyone who thought that they might not be paying all their US taxes use an exchange based in the USA? Is it something to do with needing to convert the Bitcoins to Dollars so that you can actually spend them?
Question 2: Given that one of the main selling points of Bitcoin is anonymity, why would someone operating an exchange keep any but the barest records? I appreciate that they can't destroy the information now they have been asked for it, but I am trying to grasp why they would put themselves at risk of being in that position by retaining it in the first place?
> the many legal tax loopholes that the government refuses to close?
Such as?
It is my understanding that if a US citizen has any income, they are expected to declare it, whether it is identified in data submitted by other parties (such as your employer) or not. If they don't declare and pay taxes on the income, they have probably violated the US tax code. Since buying and selling Bitcoin can result in income, not declaring that income would probably violate the tax code. The US IRS knows the tax code very well. They may sometimes push the envelope on enforcement, and every once in a while they might lose in court, but I think they win far more often than not.
Carried interest, for example
No, not a duplicate but an update. The post you linked from Nov. 18 was actually included in this story (2nd link). Today's post says "On Wednesday, a federal judge authorized a summons requiring Coinbase to provide the IRS with those records."
The Jefferson Clause of the United States Constitution...
Is that the one that talks about a guy and his wife that are movin' on up (movin' on up) to the East Side (movin' on up), To a deluxe apartment in the sky?
You have the right to remain sentient. If you give up the right to remain sentient, you will be elected to public office
It's NYT, those digs aren't random.
They are regulated by the Feds and by all 50 states* as money transmitters. That isn't cheap nor is it easy to just replicate quickly, let alone overnight.
* I think 1 or 2 states don't require a fee or registration, but there is enormous pressure for all states to regulate money transmitters
The basic issue is not about bitcoin. It is about the scope of warrants, summonses, and subpoenas. The Fourth Amendment to the U.S. Constitution states:
> The right of the people to be secure in their persons, houses,
> papers, and effects, against unreasonable searches and seizures,
> shall not be violated, and no Warrants shall issue, but upon probable
> cause, supported by Oath or affirmation, and particularly describing
> the place to be searched, and the persons or things to be seized.
I doubt there is "probable cause" that tax evasion has indeed been committed by Coinbase's users. Such a broad summons fails to describe which persons' accounts are to be examined. Since the summons was served on Coinbase, which has not been suspected of a crime, a challenge of the summons to appeals courts or the US Supreme Court might be very successful.
When the IRS or any other agency wants discovery of evidence in a case, it should be demonstrating interest in a specific person, partnership or corporation being investigated. The whole idea of John Doe warrants is an unconstitutional fishing expedition. Let's hope that now we'll get some new Supreme Court appointees who don't rubberstamp the government's every whim.