Coinbase User (Also, Class Action Lawyer) Files To Intervene In Case Where IRS Wants Info On All Coinbase Users

from the overreach dept

Wed, Dec 14th 2016 5:08pm — Mike Masnick

We've written a bit about how the IRS is trying to force Coinbase to hand over information on all its users, because it's discovered some evidence of at least one person using Bitcoin, via Coinbase, as a tax dodge. While the demand seems massively overbroad, so far the judge has allowed it to move forward. Coinbase has indicated that it will fight back on behalf of users, but nothing definitive has been done yet -- which has some Coinbase users feeling uncomfortable. At least one has now filed to intervene in the case, in order to seek to quash the summons.

Now, where this gets slightly more interesting is the fact that the individual filing, Jeffrey K. Berns, is a managing partner of a class action law firm that has his name on the masthead. The firm does seem to be focusing on building up a reputation in the cryptocurrency world, with a blog dedicated to the topic and much of the firm's recent press relating to issues on cryptocurrencies. So it appears that some of the decision to intervene here may be a bit of brand building, as the firm seems to want to be the go-to player for legal issues dealing with cryptocurrencies. At the very least, that may raise some questions about the motivations behind the filing here -- but it does seem like some objections should be raised to allowing a grand fishing expedition by the IRS.

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Filed Under: cryptocurrency, doj, irs, jeffrey berns, taxes
Companies: coinbase

7 Comments

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Nathan F (profile), 14 Dec 2016 @ 5:22pm

Sadly they are going to be denied on the grounds that 'they do not have an interest in the business records' thanks to the Third Party Doctrine. We have seen it before and will likely see it again.
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Anonymous Coward, 14 Dec 2016 @ 9:32pm

The IRS should have done like the FBI...
and gotten a gag order. That way no one could object to what they were doing.
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Ninja (profile), 15 Dec 2016 @ 3:35am

Bitcoins are a very good way to move money around without many control mechanisms the Governments have around so I suspect it is already being used by the powerful to move around illegal/criminal money around. This could actually help the currencies out there keeping the Govt away. It will be interesting to see how this will develop and if this guy is just lending his face to these power figures.
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Quiet Lurcker, 15 Dec 2016 @ 5:06am

Re:

...suspect it is already being used...to move around illegal/criminal money around.

That could be true. But, do you want to have the government get access to the birth certificate you have stored in your bank safe deposit box because someone who rents one on the other side of the vault MIGHT be storing marijuana in it? I know I don't. And before you try to tell me it can't happen in this case, take a hard look at all the wrangling going on around megaupload.
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Anonymous Coward, 15 Dec 2016 @ 7:58am

ehhh. it's an excuse if they were serious about going after tax dodgers they would be focused on the rich hiding billions offshore and companies that move money out of the country. It's about squeezing the low income to save face for not going after the high income cheaters.
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Arthur Moore (profile), 15 Dec 2016 @ 2:37pm

Re: Re:
> But, do you want to have the government get access to the birth certificate you have stored in your bank safe deposit box because someone who rents one on the other side of the vault MIGHT be storing marijuana in it?

Perfect analogy of what they're asking for.
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Ninja (profile), 16 Dec 2016 @ 6:43am

Re: Re:
You got me wrong, the fact that white collar corrupt money is going through bitcoin and others may actually shield it from intrusion. You are 100% right.
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