admin • A US Federal Court has upheld the Internal Revenue Service’s (IRS) authority to seize user data from Coinbase, one of the leading cryptocurrency exchanges.
• James Harper, the plaintiff, launched a legal challenge against the IRS in August 2020 claiming that it infringed upon his rights by obtaining trading records via a ‘John Doe’ summons.
• The US District Court of New Hampshire referred to a Supreme Court ruling from May and stated that Harper wasn’t eligible for protection or relief beyond the existing “checks on the IRS’ powers.”
Court Upholds IRS Authority
A US Federal Court has upheld the Internal Revenue Service’s (IRS) authority to seize user data from Coinbase, one of the leading cryptocurrency exchanges. The court ruling dismisses claims that the tax body’s action infringes constitutional rights.
Background on Case
James Harper, the plaintiff, launched a legal challenge against the IRS in August 2020 claiming that it infringed upon his rights by obtaining trading records via a ‚John Doe‘ summons. ‚John Doe‘ summons is a conventional strategy employed by various government bodies permitting them to legally request third-party data belonging to an individual or group — primarily used for inspecting potential tax evasion cases.
Ruling in Favor of IRS
The US District Court of New Hampshire referred to a Supreme Court ruling from May and stated that Harper wasn’t eligible for protection or relief beyond the existing “checks on the IRS’ powers.“ This set precedent for further proceedings in this case which ultimately led to dismissal of Harper’s assertions against the tax body.
Harper’s Legal History with Coinbase & IRS
An early Bitcoin trader and former legal consultant for Bitcoin Foundation, Harper had previously contested an IRS demand for Coinbase to surrender all user trading records. He filed an amicus brief in 2016 opposing this request but was later compelled by another separate summons issued against Coinbase in 2017 which included his own information as well. Last year he was granted right to sue IRS by First Circuit following an appeal made due to him failing declare his cryptocurrency trades adequately in 2013 and 2014 resulting into legal actions taken against him and others as well.
Conclusion
Ultimately court ruled in favor of federal government based off what Congress has granted them power wise as far as enforcing taxes goes thereby dismissing claims made by James Harper about how their approach violates certain constitutional amendments such as Fourth and Fifth Amendments