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Legal Sparring Continues in Bitcoin User's Battle with IRS Tax Sweep (fortune.com)

Posted by msmash on from the twisted-cases dept.

In a strange twist, Coindesk reports that the IRS has, somewhat indirectly, removed one target from its broad request for data about U.S. users of the Bitcoin exchange Coinbase. It no longer wants data about Jeffrey Berns, a lawyer who also happens to be fighting the IRS's "John Doe" request in court. From a report on Fortune: Berns originally filed a motion on December 13th asking the U.S. District Court for Northern California to stop the IRS' subpoena of Coinbase records. The IRS believes that its request, filed in November, is justified because Bitcoin owners "may fail, or may have failed, to comply with one or more provisions of the internal revenue laws." Berns is represented by his own law firm, Berns Weiss, whose motion argues that the IRS data search is "an abuse of process" and "overbroad." Berns has said his motion is intended to defend not only himself, but all targeted users. But according to a December 28th court filing by the IRS, Berns is no longer a target of its records request because he identified himself in his own filing, and the request is only for unidentified users. Therefore, the IRS argues, Berns is not a party to proceedings and his request to block the data grab should be thrown out of court. In response, Berns Weiss had its own spin, telling Coindesk that "The IRS's willingness to withdraw the summons as to Mr. Berns only because it is now aware of his identity," and without the additional information they're seeking about many other Coinbase users, "Makes it clear that the IRS does not have a legitimate purpose in seeking substantial personal and financial information concerning approximately 3 million Americans."

4 of 101 comments (clear)

  1. Sounds fair... by Anonymous Coward · · Score: 5, Insightful

    So the IRS's argument is that, as soon as someone identifies themselves by suing them to prevent this release of data, they'll remove that person from the data grab request so they no longer have standing to sue them, and get the case thrown out?

    Hey America, there's this concept called 'justice'. You knew about it, once.

    1. Re:Sounds fair... by mysidia · · Score: 5, Insightful

      they'll remove that person from the data grab request so they no longer have standing to sue them, and get the case thrown out?

      When it comes to a violation of personal liberty, privacy, and constitutional rights protecting individuals, the concept of "Standing" is bogus and needs to be eliminated. Every American is damaged if personal liberties and privacy are infringed upon by the government.

  2. New depths of crazy. by Anonymous Coward · · Score: 5, Insightful

    "may fail, or may have failed, to comply with one or more provisions of the internal revenue laws."

    Excuse me!? First off swap that out with any other situation such as "we need a search warrant to search all of the apartments in a building because one of them may have, or may soon commit a crime" and any judge in the US with their head screwed on straight would laugh it out of court. Secondly even the IRS has I believe admitted that the tax code is so insanely convoluted that not even they can truly define the legal bounds of the tax code. So not only are they asking for sweeping ability to search personal records but they can't even define what laws those people may or may not have run afoul of.

  3. Re:In Short by sir-gold · · Score: 5, Interesting

    But those John Does would have to prove legal standing (by proving they were specifically targeted), and by identifying themselves, would then lose the legal standing they had gained, same as what happened to the lawyer.

    The government has been very careful to make sure nobody can use the legal system against them. They have set up a catch-22 situation where establishing standing causes a loss of standing, so that literally nobody has the right to sue.