U.S. Government Seeks to Dismiss Coinbase User’s IRS Appeal

On May 31, COINOTAG reported that the U.S. government has submitted a motion to the Supreme Court, arguing against Coinbase user James Harper’s appeal to the IRS for access to his cryptocurrency transaction records. Attorney General D. John Sauer emphasized that Harper’s financial records do not come under the protection of the Fourth Amendment, as they were voluntarily disclosed to the exchange. This information was legally obtained as part of a broader investigation into cryptocurrency taxation initiated by the IRS in 2016, which highlighted that numerous Coinbase users had failed to declare their gains.

The IRS had issued a “John Doe” summons compelling Coinbase to provide data on users with substantial trading activity. Harper’s lawsuit contended that this action represented an unconstitutional search; however, lower courts determined that Coinbase’s records qualify as business documentation rather than private information. The Supreme Court’s decision on whether to hear the case is still pending, and a denial would affirm the First Circuit Court of Appeals’ support for the IRS.