Coinbase User Failed To Protest IRS Access To His Data

Key Points:

• A Coinbase user’s statement about a privacy violation by the Internal Revenue Service (IRS) did not receive much support from the judge.
• The ruling strengthens the IRS’s authority over financial data collection, potentially setting a precedent for future privacy challenges.

US District Court Judge Joseph N. Laplante dismissed Coinbase user James Harper’s request to the Internal Revenue Service (IRS) to obtain personal data from Coinbase in a ruling.

The IRS obtaining his data through subpoenas does not violate Harper’s right to a fair hearing or protection from unreasonable searches and seizures.

However, in his most recent judgment, Laplante sided with the IRS, and he stated that Harper had no standing to claim an interest in the records under the Fourth or Fifth Amendments. Harper’s claim of a privacy violation was further weakened by the judge’s assertion that Coinbase was the rightful custodian of Harper’s account documents.

Judge Laplante noted that Harper voluntarily disclosed his information to Coinbase. Additionally, the company’s privacy policy warns against possible government expropriation, and this significantly undermines Harper’s view that disclosure to Coinbase is voluntary.

This reaffirms the broad authority that the IRS has, allowing it to issue subpoenas in a variety of circumstances. The ruling strengthens the IRS’s right to collect financial data, potentially setting a precedent for future privacy challenges.

In addition, the judge dismissed Harper’s claim of a breach of due process and stated that Harper did not have any property rights to the record. Even if he had such rights, the summons would be significantly restricted, requiring court approval.

Reportedly, the plaintiff, James Harper, opened accounts on exchanges like Coinbase in 2013 and received Bitcoin as income for his consulting work. In 2016, the IRS issued a subpoena to this exchange seeking anonymous taxpayer information, which Coinbase initially denied, leading to a second legal pursuit by the IRS to ensure compliance.

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