Coinbase ‘extremely concerned’ with IRS petition

Coinbase introduces multisig vault

Coinbase introduces multisig vaultLargest US-based bitcoin exchange company Coinbase has said it is “extremely concerned with the indiscriminate breadth of the government’s request” following the filing of court papers by lawyers for the Internal Revenue Service (IRS) to serve a summons on the exchange, reports the Wall Street Journal (WSJ).

The IRS must first get court approval before it can serve such a summons.

The papers, which were filed last week, seek records of all US customers of Coinbase over a three-year period. The government’s request, which is part of a bitcoin tax-evasion probe, attempts to isolate all US users of Coinbase who “conducted transactions in a convertible virtual currency” from 2013 to 2015.

According to a court filing by the Justice Department attorneys, an IRS agent had “identified and interviewed three taxpayers who had used virtual currencies as a means of evading taxes” and that two of these taxpayers were corporate bodies that “had wallet accounts at Coinbase and attempted to conceal bitcoin transactions as technology expenses on their tax returns.”

Coinbase’s response to the IRS petition reads on its blog:

“Our customers may be aware that the U.S. government filed a civil petition yesterday in federal court seeking disclosure of all Coinbase U.S. customers’ records over a three year period. The government has not alleged any wrongdoing on the part of Coinbase and its petition is predicated on sweeping statements that taxpayers may use virtual currency to evade taxes. Although Coinbase’s general practice is to cooperate with properly targeted law enforcement inquiries, we are extremely concerned with the indiscriminate breadth of the government’s request. Our customers’ privacy rights are important to us and our legal team is in the process of examining the government’s petition. In its current form, we will oppose the government’s petition in court.”

Image courtesy of Coinbase