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Coinbase User’s Surveillance Conspiracy- IRS Denies Tax Reporting Claims

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The United States Internal Revenue Service (IRS) has brushed aside surveillance conspiracy claims put forward by a Coinbase user – William Zietzke. 

The agency has stated that its summons towards leading American Crypto exchange Coinbase users was certainly authentic and reliable. 

In a recent court submission, the tax agency argued before a California federal court; that its investigation on Coinbase customer William Zietzke was being done according to the set regulations and was indeed legitimate. 

The Conspiracy Claim 

According to a Coinbase User named Willian Zietzke, the summons was issued outside the IRS’s authority. He claims that IRS summons was too complicated of a request as it was not restricted to the 2016 tax year only. 

Mr Zietzke made the claims after failing to obtain financial records from IRS pertaining to Zietzke’s 2016 return. He also notes that the IRS wanted to gain access to financial records that could jeopardize his financial and personal security if obtained by unwarranted persons.

IRS Shrug Off the Coinbase User’s Claims

Following Zietzke’s serious claims, IRS was quick to respond and filed the case before the Washington DC resident. The court rules that it saw no reason why the summons should not be enforced. IRS went on to shrug off Zietzke’s vague claims that the tax agency was putting up a database to track cryptocurrency users’ accounts. 

Part of the court filing read: 

“Rather than allow the IRS to summon the information it needs from Coinbase, Mr Zietzke invents an IRS surveillance conspiracy and argues that the IRS has all the relevant information it needs to determine whether he is entitled to the refund he claims − that is limited, sometimes redacted, and ever-changing information he has provided “By the summons at issue, the IRS seeks information to do exactly what Congress charged it to do: make an accurate determination of Mr Zietzke’s tax liability.”. 

On its part, IRS stated that it was necessary to review tax records dating back to 2016 and beyond to ascertain Mr Zietzke’s tax liability, considering that his claim was based on a refund on Bitcoin transaction records in 2011.

IRS Continues its Surveillance of the Crypto Network 

IRS has increasingly monitored the crypto network affecting the anonymity of the space. In 2018, a federal district court granted partial enforcement of an IRS summons seeking information regarding virtual currency transactions. 

The courts granted IRS the authority to investigate account holders with Coinbase who may have failed to pay federal taxes on their cryptocurrency profits. On July 26, 2019, IRS announced that it has begun sending letters to more than 10, 000 taxpayers who might have failed to file income tax resulting from profits due to cryptocurrency transactions. Nonetheless, to better monitor the crypto space, IRS and agencies alike need better surveillance mechanism, especially in regards to anonymous coins.    

Wayne Jones
Wayne is a Blockchain enthusiast and expert in crypto trading. Currently, I cover trendy issues on digital currencies.

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