New IRS Filing Tries to Force Coinbase Into Handing Over its Data

The US Internal Revenue Service has asked a federal court to compel digital currency exchange Coinbase to provide it with user records in response to a subpoena.

The tax agency’s fight to obtain records on users between the years 2013 and 2015 has entered a new chapter, coming months after the IRS first sought court approval for its "John Doe" subpoena in November. Since then, both Coinbase and one of its customers, Jeffrey Berns, have filed to intervene in the case in a bid to stop what both parties have blasted as a regulatory overreach.

To date, Coinbase has not provided that data to the government, sparking today's petition to "enforce the summons", according to public records.

Coinbase said that it was reviewing the new filing and indicated that it could move to launch further court challenges in light of the subpoena.

The startup told CoinDesk:

"Our legal team is in the process of reviewing the IRS’s motion. We will continue to work with the IRS to assess the government’s willingness to fundamentally reconsider the focus and scope of the summons. If it does not, we anticipate filing opposition papers in court in coming months. We will continue to keep our customers updated as to status."

First starting in November 2016, the IRS sought court permission to serve a summons to Coinbase to identify potential tax evaders. The IRS began regulating bitcoin as a taxable form of property in 2014, though the agency has faced criticism from within the government regarding its approach to digital currencies.

The original subpoena request was initially approved by a federal judge, and a counter effort, led by Berns, soon followed. A hearing on recent filings is set for 23rd March.

Disclosure: CoinDesk is a subsidiary of Digital Currency Group, which has an ownership stake in Coinbase.

Image via Shutterstock

Stan Higgins contributed reporting.