Congressional Leaders Question IRS Summons to Coinbase
It seems a few U.S. politicians are taking issue with the recent Internal Revenue Service’s (IRS) actions towards users of the bitcoin trading platform Coinbase.
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Three Congressional Leaders are Asking for the Reasons Behind the Recent IRS summons to Coinbase
A letter addressed to IRS commissioner, John Koskinen, concerning the agency’s legal battle with Coinbase was sent on May 17 stemming from the congressional offices of House Representatives Vern Buchanan, Kevin Brady, and Senator Orrin Hatch. According to the letter under Senate and House rules, congressional members have the authority to examine IRS actions in regards to emerging tax administration. This includes the emergence of digital currencies the letter explains, and the three officials are requesting information concerning the IRS summons to Coinbase.
“Please describe the IRS’s current digital currency strategy and provide any existing policies and procedures,” explains the congressional letter to the IRS commissioner. Furthermore, the letter asks the following questions;
How does the John Doe summons issued to Coinbase fit into the larger IRS digital currency strategy? — What is the justification for the IRS’s position that all Coinbase customer records are needed for this timeframe?
‘We Strongly Question Whether the IRS has Actually Established a Reasonable Basis’
The IRS’s summons to Coinbase is being fought by the company for being too broad, and customers have also filed legal action against the tax agency’s requests. “Coinbase remains concerned with the indiscriminate and overbroad scope of the government’s summons, and we have produced no records under the summons,” wrote Coinbase lawyer, Juan Suarez back in March.
According to an affidavit written by IRS tax agent Utzke the agency’s reasoning is due to less than a thousand Coinbase customers filing taxes. However, the three congressional members say they are questioning the IRS’s actions against the records of a half of a million Coinbase customers stating in the letter;
We strongly question whether the IRS has actually established a reasonable basis to support the mass production of records for half of a million people, the vast majority of whom appear to not be conducting the volume of transactions needed to report them to the IRS. Based on the information before us, this summons seems overly broad, extremely burdensome, and highly intrusive to a large population of individuals.
The recent letter from Senator Orrin Hatch, and representatives Brady, and Buchanan says they would appreciate it if the IRS would provide the congressional members with a briefing concerning the summons. The letter also states it would like to receive this information no later than June 7, 2017.
“The IRS’s actions, in this case, can also set a dangerous precedent for companies facilitating virtual currency transactions that could be subject to a similar summons,” the letter adds.
What do you think about the letter sent to the IRS from the three U.S. congressional members? Do you think this is positive news that they are questioning the IRS summons? Let us know what you think in the comments below.
Images via Shutterstock, Bitcoin.com, Coinbase and IRS websites.
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