Legitimate? IRS Defends Coinbase Customer Investigation in Court Filing

TheU.S. Internal Revenue Service (IRS) has actually submitted brand-new court files in its long-running claim versus cryptocurrency exchange start-up Coinbase, public records reveal.

Asformerly reported by CoinDesk, the IRS is looking for to recognize potential tax avoiders, years after it initially transferred to start taxing bitcoin as a type of intangible property

Thetax firm had actually been offered a September 1 due date to provide its arguments in assistance of a narrowed summonsfor customer info in between the years 2013 and 2015, and has actually sent several filings, inning accordance with PACER. These consist of reactions to outdoors advocacy groups that have actually transferred to obstruct the court effort with arguments of their own.

Inreaction to Coinbase’s petition to obstruct the summons, the firm assaulted the idea that it was seeking to impose it “for research or public relations reasons,” calling the summons part of a “legitimate” investigation.

Lawyersfor the firm composed:

“The IRS sought and issued the summons to Coinbase because it suspects there is a tax compliance problem with U.S. taxpayers using virtual currency and it is duty-bound to investigate issues of tax non-compliance − not for research or any public relations purpose. Nevertheless, the summons is not made unenforceable because the IRS will benefit from the additional educational aspect of the summons and any research it may yield.”

Elsewherein the file, the IRS repeats a crucial argument made previously this year, specifying that it thinks Coinbase might know relating to possible tax avoiders.

“The United States has offered evidence that, based upon the information available to the IRS there appears to be a reporting gap between the number of virtual currency users Coinbase claims to have had during the summons period (500,000) and U.S. bitcoin users reporting gains or losses to the IRS during the summoned years (807, 893, and 802),”the filing states.

Justice statue imageby means of Shutterstock

Disclosure: CoinDesk is a subsidiary of Digital Currency Group, which has ownership stake inCoinbase

Thecomplete opposition filing to Coinbase’s petition can be discovered listed below:

UNITED STATES’ RESPONSE TO COINBASE INC.by CoinDesk on Scribd