important point
- A New Hampshire federal district court ruled in favor of the IRS, ruling that John Doe Sammons did not violate U.S. constitutional rights.
- The ruling argued that private citizens were not allowed to sue the IRS for alleged tax violations.
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a A U.S. federal court has confirmed that the Internal Revenue Service (IRS) has the authority to demand user data from major cryptocurrency exchange Coinbase. The ruling dismissed a constitutional challenge raised by early cryptocurrency trader James Harper. according to to the official case file.
Mr. Harper accused the IRS, former Commissioner Charles Rettig and 10 officials of infringement by subpoenaing “John Doe.” A John Doe subpoena is when the IRS requests or requests information about an anonymous taxpayer (usually a taxpayer who holds funds in an offshore bank account). according to to the IRS.
refer In a 2021 Supreme Court decision in CIC Services LLC v. IRS, the New Hampshire United States District Court ruled that IRS powers granted by Congress meant Harper had no additional protections or remedies. . Harper had previously argued that the request violated his Fourth and Fifth Amendment rights, according to the case file. Court documents further corroborate this, stating:
“With respect to Mr. Harper’s statutory claims, the statute at issue neither expressly nor implicitly gives taxpayers private rights to sue the IRS for purported statutory violations.”
Despite Harper’s resistance, Coinbase reportedly had to release top user data in response to a subpoena against the exchange. The IRS has taken action against Harper for not declaring cryptocurrency transactions in 2013 and 2014.
Sept. 22, 2022 U.S. District Judge Paul G. Gardephe Licensed The IRS has asked MY Safra Bank to issue a John Doe subpoena to identify U.S. taxpayers who may have failed to fully report their cryptocurrency transactions.
The John Doe summons specifically targets customers of cryptocurrency prime broker SFOX, who have used MY Safra Bank’s services for digital currency trading.
“John Doe’s subpoena will direct MY Safra to allow the IRS to identify U.S. taxpayers who are customers of SFOX and who have engaged in cryptocurrency transactions that may not have been properly reported on their tax returns. I am instructing you to make a record to do so.”
In response, Assistant Attorney General David A. Hubbert said, “Taxpayers transacting in cryptocurrencies should understand that any income or profit derived from transacting cryptocurrencies is subject to tax.” The information sought in the subpoena approved today will help ensure cryptocurrency holders comply with tax laws. ”
