The IRS can now serve bitcoin and ether exchange startup Coinbase with a summons for information about its users, a federal judge ruled today.
In an order dated 30th November, Judge Jacqueline Scott Corley sided with a request filed earlier this month by the IRS as part of its bid to investigate alleged tax violations in the US pertaining or connected to digital currency use.
When reached for comment, Coinbase said that it expected the order and that it would release a formal statement.
The company later said:
Following the issuance of the court order, the US government celebrated the development.
"Transactions in virtual currency are taxable just like those in any other property. The John Doe summons is a step designed to help the IRS ensure people doing business in the emerging economy are following the tax laws and meeting their responsibilities," IRS Commissioner John Koskinen said.
The IRS is seeking Coinbase user records from between 31st December, 2013 and 31st December, 2015. The startup said after the agency’s initial filing that it would oppose the effort.
Since mid-2015, the IRS has considered bitcoin and other digital currencies as kinds of taxable property. A recent report from the agency’s inspector general, however, blasted the IRS for a failure to develop a cohesive strategy for digital currency taxation – something that tax professionals have criticized it for as well.
This article has been updated with comment from Coinbase.
The full court order can be found below:
Disclosure: CoinDesk is a subsidiary of Digital Currency Group, which has an ownership stake in Coinbase.
Image via Shutterstock
The leader in news and information on cryptocurrency, digital assets and the future of money, CoinDesk is an award-winning media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. In November 2023, CoinDesk was acquired by Bullish group, owner of Bullish, a regulated, institutional digital assets exchange. Bullish group is majority owned by Block.one; both groups have interests in a variety of blockchain and digital asset businesses and significant holdings of digital assets, including bitcoin. CoinDesk operates as an independent subsidiary, and an editorial committee, chaired by a former editor-in-chief of The Wall Street Journal, is being formed to support journalistic integrity.