Congress Seeks Answers From IRS About Its Bitcoin Tax Investigation
Congressional leaders want answers about the Internal Revenue Service's ongoing effort to obtain user records from Coinbase.
:format(jpg)/cloudfront-us-east-1.images.arcpublishing.com/coindesk/5UBZ3LBA6BHTPKJNDHOWVYLTDI.jpg)
(Image via Shutterstock)
/arc-photo-coindesk/arc2-prod/public/LXF2COBSKBCNHNRE3WTK2BZ7GE.png)
Congressional leaders want answers about the Internal Revenue Service's ongoing effort to obtain user records from digital currency exchange startup Coinbase.
Hatch is the chairman of the Senate Finance Committee. Brady is the chair of the House of Representatives Committee on Ways and Means, while Buchanan leads that body's Oversight Subcommittee.
The three wrote:
The move comes months after the IRS sough to to compel Coinbase to produce the records, a court effort that began in November. At the time, the IRS said it was seeking information about the startup's bitcoin customers as part of an effort to prevent potential tax avoidance. The IRS declared digital currencies a taxable form of property in 2014.
Since the IRS first went to court, both Coinbase and one of its customers moved to stifle the effort. The tax agency later asked another judge to approve its initial summons, and earlier this week, a pair of Coinbase customers (who are seeking anonymity) asked a federal judge in California to halt the tax agency's summons.
According to the letter, the three members of Congress are seeking info about the IRS strategy on digital currencies – which its own watchdog has criticized as deficient and in need of an overhaul – as well as the justifications for its effort against Coinbase. The group said it wants answers before 7th June.
Notably, the three also asked whether the IRS would take a more hands-off approach to digital currencies in order to facilitate adoption.
"Will the IRS consider a de minimis exemption or other action to remove practical obstacles to such moderate, transactional use of digital currencies?" the letter stated.
Disclosure: CoinDesk is a subsidiary of Digital Currency Group, which has an ownership stake in Coinbase.
Congress image via Shutterstock
Disclosure
Please note that our privacy policy, terms of use, cookies, and do not sell my personal information has been updated.
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.
Learn more about Consensus 2024, CoinDesk's longest-running and most influential event that brings together all sides of crypto, blockchain and Web3. Head to consensus.coindesk.com to register and buy your pass now.