US Judge Rules that IRS is not violating privacy by requesting for crypto exchange data
A judge of the California federal court has affirmed the validity of the United States Internal Revenue Service’s (IRS) request for data from crypto exchange Bitstamp in connection with an individual tax reporting case.
In line with the Nov 25th filing, the court has found that five of the six arguments canvassed against the IRS “lack merit,” but has conceded on one point that the tax agency’s summons was indeed overbroad, as the Petitioner contended.
The filing relates to court proceedings initiated by William Zietzke, who has argued that the IRS is crossing its remit in conducting an audit of his tax returns.
In the filing, Zietke had initially informed the IRS of his own mistake in a tax return that had allegedly overestimated his long-term capital gains in 2016.
In seeking a refund from the IRS to correct his error, the agency set out to investigate Zietke’s case, requiring him to provide extensive data on his history of Bitcoin holdings and transactions.
According to the court , Zietzke has contested the IRS’ actions on six grounds; firstly, that it issued the summons to Bitstamp “in bad faith”; secondly, that it seeks data that is irrelevant to its audit of the Petitioner’s reporting; thirdly, that it already possesses the information that it seeks from Bitstamp.
The California court in its ruling, has conceded only one of Zietke’s arguments, noting that he is “correct that the summons is verbose because it seeks both material and immaterial things.”
The court states that the IRS’ summons would require Bitstamp to produce data that is without due temporal restriction.