Coinbase

The IRS Narrows Data Request to Coinbase Users that Transacted For $20,000

The IRS will no longer target a wide-range of Coinbase users via its information request, which it filed on Coinbase back in March. Instead, the agency made concessions to seek account data of individuals who transacted — meaning they bought, sold, sent, or received — $20,000 worth of bitcoin in any transaction type. 

Also read: Israeli Official Urges Regulators to be More ‘Paternalistic’ Regarding ICO’s and Bitcoin

The IRS Narrows Data Request to Coinbase Users that Transacted For $20,000
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A July 6 court document revealed the request: “The United States seeks information (delineated below in 3a-f) for users (“covered users”) with at least the equivalent of $20,000 in any one transaction type (buy, sell, send, or receive) in any one year during the 2013-2015 period.

The IRS is seeking a variety of information on these “covered users.” It is requesting addresses, drivers license and passport information, all wallet addresses and public key details.

Early Concessions and Coinbase User Push Back

The IRS made concessions to only go after these heavier users after they received ample push back last week from Coinbase and several anonymous users. This caused DOJ attorney Amy Matchison to narrow all requests for information. Both the John Doe users and Coinbase argued the data request was over-broad and unnecessary. It could actually put users at risk.

Bitcoin.com covered the story last week, saying,

In a June 22 “Motion to Intervene” court document, the plaintiffs mentioned that all the excess personal information requested by the IRS could easily be retrieved by hackers. This would compromise personal account information from Coinbase users. The document cited the IRS has not been careful with other people’s documents, and they lose sensitive information to nefarious entities too often.

Originally, the IRS sought a plethora of information, ranging from all users. They wanted vault data, account information, security settings, monetary transfer details, and a number of other things.

Will the IRS Request More Information?

However, according to the most recent court document, the IRS could still seek more information regarding certain users. The document detailed, “The United States reserves The IRS Narrows Data Request to Coinbase Users that Transacted For $20,000the right for the Internal Revenue Service to issue Summonses in individual examinations of Coinbase users for the information that it no longer seeks in this proceeding.”

In other words, the IRS could call upon individual Coinbase users who transacted in any amount of Bitcoin. Nonetheless, the IRS may use the present proceeding as a foothold to gather more data in their hunt for people who use Bitcoin or other digital currencies.

Do you believe the IRS will seek more information at a later date? Should Coinbase continue to push back? Let us know in the comments below.


Images via Shutterstock and coinbase.com


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  • Common sense escapes liberals.

    Hell yes coinbase should push back. It is bullshit for the IRS to do witch hunts hoping to find money they can grab. Enough already with government abuse of power.

    • Zoso Bonzo

      The beginning of the end for bitcoin.

      • Liberty88

        You wish.
        You must be working for a Central Bank or the IRS.

      • Zyo

        ah ah ah!, if Coinbase failed, other one will raise outside of the US jurisdiction… the more the gov play against those 100% legal company, the less controls they will have over what’s happening there. Even if Bitcoin get 100% illegal in the US, it will be used elsewhere and illegally in the US.

      • CryptoCrusher

        Nonsense. This is the beginning of the end of centralized government. Bitcoin is Global, and this stunt by the IRS is proof of their desperation. Just read the headlines “Russian Politician Proposes Central Bank Follow Japan’s Lead to Legalize Bitcoin”.

        Good Game! K Thanks Bye!

  • Man o’ man it is getting interesting. What will Coin base do? The IRS has painted the target. There is no graceful exit when they have got your tail. When the Attorneys start shifting focus, it is time to ask for a Magistrate Hearing to seal in the time frame of engagement. Coin base needs better representation that makes the IRS and the Justice Dept focus on one request not a badgering of requests. Chess game on!

  • $20,000 now, $10,000 later and then everyone else. The president must be set. (Sarcasm on) $20K is reasonable right? (Sarcasm off).

  • John Galt

    Fascist bastards. I can’t wait until USDs become obsolete, and they ability to control finances vanishes to the rationality of cryptography.

    • Robert McAlery

      Fascist they may be, but no organisation can realistically go up against the IRS and win. As far as waiting for the USD to become obsolete, I hope you’ve got a great deal of patience.

      • Thomas J Pastore

        Bitcoin is not an organization

  • sjs

    Well of course the IRS is going to come after crypto users. What did people think the KYC/AML data collection was all about? The info has been collected by Coinbase and now the prosecutions will start, that’s how the state operates.

  • scott manhart

    Remember the mandatory reporting of cash deposits over $10K? That quickly degenerated to any combination of cash deposits exceeding $10K over whatever time period the IRS felt was sufficient to warrant their arbitrary scrutiny. The same will happen even faster with BTC. Particularly given that prices will rise significantly in the latter half of the year. Many BTC holders will find themselves running afoul of transacting balances they never considered. Note they are identifying transactions which means moving your balance from an exchange to a hard wallet could make you subject to civil asset forfeiture.