Legal Battle: Coinbase Users Fight IRS Over Privacy Erosion

The Case Against the IRS Summons

A motion has been filed to halt the IRS’s grand plan to access the personal and Bitcoin transactional data of over a million Coinbase users between 2013 and 2015. This motion is spearheaded by Los Angeles attorney Jeffrey K. Berns, who, not surprisingly, used Coinbase to buy and sell his own Bitcoin stash. He estimates that this move puts over a million Americans in a pickle, all thanks to the John Doe summons issued on November 30.

Meet the Judge: Jacqueline Scott Corley

The case has been assigned to Judge Jacqueline Scott Corley, who granted the IRS summons. The summons is expected to tick off many, as it demands a plethora of user data from Coinbase, which is America’s biggest exchange for virtual currencies (licensed in 34 states, mind you). It asks for:

• User profiles and their history
• User preferences and security settings
• Payment methods and funding sources

Basically, it’s a fishing expedition of epic proportions!

Berns vs. IRS: Battle of the Statements

Berns is not sitting quietly on the sidelines; he thinks the summons is about as legitimate as a three-dollar bill. In a fiery statement, he remarked:

“There is no legitimate reason to seek these records. Individuals with no taxable events shouldn’t be subject to a complete investigation because the IRS doesn’t understand a developing technology.”

The Motion: A Request for Clarity

The filing, scheduled for hearing on January 19, 2017, seeks to either squash the IRS summons or, alternatively, gain some protection associated with it. Berns argues the IRS hasn’t made a strong enough case to justify requesting all that sensitive information:

• They haven’t narrowed down the focus of their investigation.
• The information requested is overbroad.
• There’s no clear purpose to justify this invasive data grab.

In short, he wants to make sure that the IRS isn’t just browsing through a million users’ lives like it’s the latest Netflix series.

The Risks of Oversharing

Citing previous hacking scandals—including those involving the IRS itself—Berns argues that exposing this data could put the identities and funds of these one million citizens in jeopardy. The government has suffered breaches before, leaving a cloud of skepticism on the IRS’s capabilities to securely handle all that information.

Final Thoughts

This lawsuit could be a pivotal moment for Coinbase users fighting against what they perceive as governmental overreach in privacy matters. Let’s just hope the IRS remembers to keep its hands out of people’s virtual pockets. It seems we aren’t just fighting for taxes anymore, but also to prevent an all-out privacy invasion.