BITCOIN

Lawyer accuses IRS of pursuing ‘improper’ summons in Coinbase case

TAGs: Bitcoin, Internal Revenue Service, Jeffrey Berns

And so the legal fight continues.

Lawyer accuses IRS of pursuing ‘improper’ summons in Coinbase caseJeffrey Berns, the Los Angeles-based lawyer who attempted to block the U.S. Internal Revenue Service (IRS) from issuing a “John Doe” summons on bitcoin wallet service Coinbase is back in court.

If you recall, Berns went to court in December to dispute the legitimacy of the IRS’s effort to obtain the identity and full transaction history of Coinbase customers who bought virtual currency from the wallet service between 2013 and 2015. At the time, Berns, who’s also a Coinbase customer, wanted the court to either quash its previous approval or put in place a protective order to stop the tax agency on its tracks, arguing that the summons “would constitute an abuse of process.”

The IRS, however, turned Berns’ argument against him, pointing that since he already identified himself as a Coinbase user, he’s no longer the subject of the summons or even connected to the matter, and that the issue—as it affects Berns—has effectively been resolved.

But Berns refuses to be outdone.

The lawyer recently filed a reply to counter the IRS response, according to Forbes. In his reply, Berns accused the IRS of attempting to “artificially moot the motion” because it does not want to court to scrutinize its actions in pursuing an “improper” summons.

Berns said that the IRS decision to withdraw the summons as it applies to him is a “transparent attempt by the IRS to avoid judicial review.”

The John Doe summons will be used to obtain information about possible violations of internal revenue laws by individuals whose identities are unknown, the court said. Specifically, these summons direct Coinbase to produce records identifying U.S. taxpayers who have used its services, along with other documents relating to their virtual currency transactions.

Coinbase, a start-up based in San Francisco with funding from several leading venture capital firms, was put under intense scrutiny after tax agents uncovered found three cases in which people were using Bitcoin to evade taxes. This prompted in the IRS request for a John Doe summon, which was approved by a Northern California District Court judge in November.

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Bitcoin traded at a high $1,057 early Wednesday morning, with trade volume of $96.17 million.

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