Coinbase User Has No Right To Block IRS Access To Crypto Records, Says US Govt

The US government has argued that a Coinbase user, James Harper, has no constitutional right to block the IRS from accessing his cryptocurrency transaction records.

In a Supreme Court filing dated May 30, Solicitor General D. John Sauer stated that Harper does not have Fourth Amendment protection over financial records held by Coinbase because he voluntarily shared this data with the exchange.

The IRS obtained the records through a judicially approved summons as part of a 2016 investigation into widespread tax underreporting on cryptocurrency gains.

Harper sued the IRS claiming that the agency's actions were an unconstitutional search of his personal records. However, lower courts ruled against him, stating that Coinbase’s records are business documents, not Harper’s private papers, and that the IRS acted lawfully.

The government cited Supreme Court precedent, including United States v. Miller, which holds that individuals have no reasonable expectation of privacy in financial records held by third parties like Coinbase. Coinbase’s privacy policy also warned users that information could be shared with law enforcement.

Coinbase itself has supported Harper’s position by filing an amicus brief urging the Supreme Court to reconsider the third-party doctrine, which currently allows the IRS to access customer data without a warrant.

Coinbase argues that this doctrine is outdated in the digital age and that users should have a reasonable expectation of privacy in their digital financial information.

Despite Coinbase’s stance, the government urges the Supreme Court to reject Harper’s challenge and uphold the IRS’s authority to obtain crypto transaction records through proper legal channels.

The US government maintains that Coinbase users do not have the right to block IRS access to their crypto records when the IRS follows judicial procedures, and the Supreme Court has yet to decide whether to hear the case.

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