Congressional Leaders Question IRS Summons to Coinbase

Congressional Leaders Question IRS Summons to Coinbase

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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.

Also read: Zebpay Bullish About India’s Bitcoin Outlook, Experiences Strong Growth  

Three Congressional Leaders are Asking for the Reasons Behind the Recent IRS summons to Coinbase

Congressional Leaders Question IRS Summons to CoinbaseA 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’

Congressional Leaders Question IRS Summons to CoinbaseThe 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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  • chimeister

    I agree with both sides. Yes, a majority of users aren’t reporting gains or losses to the IRS. However it’s such a nascent industry let’s wait a little before we send down the hammer of regulation against all the players.

    • Or how about *frack* anyone who thinks taxes are OK and let’s use cryptocurrencies to further the nascent Voluntarist society?! ANYTHING that needs to be collectively paid for, let’s accept crowdfunding donations *or* investments. SAY NO TO TAXES!

      • Richard Wiig

        Hear, hear!

    • Kosenator

      Now the question: why must it be taxed? Why must ANYTHING be taxed.

      • Sunshine1011

        Oh, to pay for schools, roads, police, fire fighters, parks and recreation just to name a few.

        • Kosenator

          This would all be paid for if the .gov did not waste money on bonuses and international contractors. Are you aware that the money siphoned off the public at the toll gates on our national roads, for the first twelve years, go straight to the Germans who set it up?

          Are you aware that the price of food should be going down, not up, with enhanced methods and substances used? But there is a food shortage created by murdering farmers, importing revolutionaries to areas where the people farming in peace, in order to intimidate the people, burn the farms and upset the harvesting, land claims (notice the ancestral lands are ALWAYS the rich areas and productive farms and training areas).

          South Africa is one of two nation with 16 of 18 base minerals used for industry. The other is Russia, they have all 18.

          This country has enough trade and produce available to make it completely self-sufficient with minor international trade needed. The .gov is overblown, which parasites 2/3 of the money paid out in salaries there.

          Schools and libraries get burned because there is apparently a (white based) conspiracy to keep those who burn the schools, from learning.

          Blame hard enough, and everything needs to be taxed and there shall still not be enough to pay. Get people who care about the land and its people in command, and taxes will not be necessary, because food production will be enough and more, and the money brought in by trade, both nationally and internationally, now wasted on unnecessary members of parliament (and their housing facilities), can be used to pay for all those things.

          Of course, this needs that human rights be replaced with human duties. I foresee this will not be anytime soon, because you know, laziness grants, commonly called .gov grants for unemployment (in many cases merely refusing to work) and making kids simply to get the grants…

        • KDanagger

          We already have separate taxes for most of those things already. Schools, fire fighters and police are local or state taxes in various forms (sales tax, fuel taxes, school taxes, etc). Parks and recreation could be managed by the states as well, and the prospect of attracting out-of-state tourist dollars would incentivize them to do it well.
          Really, the only thing that can’t be funded by local and State taxes is national defense. However, the general federal income tax could be abolished and defense paid for by other means. We did it just fine up until 1913.

  • Liberty88

    Congressional leaders realized that the gamut is just about finished with fake currency and fake Federal Reserve. They know damn good and well that the petrodollar is finished and that a new reserve currency will take place.

    It will be Bitcoin.

  • Frank Zeleniuk

    Just a question that relates to government intervention. Is it possible that the recent ransomware cyberattack has been purposely orchestrated, from the “accidental” release of software by US intelligence who knew full well that the ransom would be demanded in bitcoin and could thus point to bitcoin as a tool of criminal enterprises and a good reason to quash it?

  • Sean Michael

    Bitcoin was conceived on the prim-is and principle no government control, no monopolistic/centralized governing forces ( HEAR THAT Bitstream/Core). Open Source no patents to encumber or control it or it’s citizens.

  • OUTTHERE

    When you consider that around 95% of all taxes paid are wasted on expenses for things that the majority of the population don’t agree with. Would it not make more sense to just abolish taxes all together. Why allow governments to spend billions of dollars annually on war toys and other unnecessary things and have control of what the taxes are spent on..
    This day and age it seems that crowd funding is the better option.
    Let the governments submit crowd funding offers to the people and we decide if we want to support the project and give funding towards it. It should be up to the people what the money is spend on, the government is their to serve us, so make it be that way.
    If the people refused to give money for supporting wars, and instead put money towards free energy or supplying fresh clean non fluoride water to people, the world would be a better place.