BITCOIN

Support from Republicans gives Coinbase extra ammo in IRS legal battle

TAGs: Bitcoin, Coinbase, Internal Revenue Service

Coinbase has found an unlikely ally in its fight to keep the U.S. Internal Revenue Service from getting its hands on the digital currency exchange’s customer transaction records—the Republicans.

Support from Republicans gives Coinbase extra ammo in IRS legal battleLast week, Senior GOP members sent a sharply-worded letter to IRS Commissioner John Koskinen, telling him that the tax agency may have been overstepping its powers in the probe into possible tax fraud committed by U.S. residents who engaged in business with or through the San Francisco-based bitcoin exchange.

The California district court allowed IRS to require Coinbase to submit records of all transactions that took place from 2013 to 2015, but the bitcoin company has taken the fight to block the summons back to court, where it was recently joined by two anonymous customers.

Now, Sen. Orrin Hatch (R-Utah), chairman of the Senate Finance Committee, and Vern Buchanan and Kevin Brady, heads of the House Committee on Ways and Means, have added more ammunition to Coinbase’s firepower.

“The summons is estimated to affect 500,000 active Coinbase customers and would result in the production of millions of pages of associated records, many of which contain personally identifiable information,” the letter stated. “Based on the information before us, this summons seems overly broad, extremely burdensome, and highly intrusive to a large population of individuals.”

The lawmakers’ concerns echoed Coinbase’s sentiments that the tax agency’s summons is too broad and might incriminate customers who have done nothing wrong.

“Coinbase remains concerned with the indiscriminate and over broad scope of the government’s summons and we have produced no records under the summons,” the exchange said in an earlier statement.

IRS, however, argued that only a small number of digital currency owners—about 802 individuals—in the United States have reported a transaction likely related to bitcoin, suggesting that many others have failed to declare digital currency-related capital gains.

Current bitcoin price

The IRS probe comes at a time when bitcoin’s price rally extends into a new week. On Tuesday, the popular digital currency climbed to a new high of $2,189.09 during the early morning’s trading.

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