A user of the cryptocurrency exchange Coinbase has sued the IRS for seizing his personal data, which could have been obtained in the course of the Coinbase prosecution.
Last summer, cryptocurrency trader Jim Harper received a letter from the IRS stating that the agency has information about his cryptocurrency account, so IRS officials have reason to suspect Harper of tax evasion on profits generated from transactions with cryptocurrencies. More than 10,000 other users received similar notifications.
The US citizen claims to have been paying taxes regularly since 2013, so he filed a lawsuit against the IRS in the District Court of New Hampshire. The trader accuses the IRS and its 10 employees of violating privacy and confidential information.
At the same time, the IRS did not disclose where it received data on Harper's cryptocurrency transactions. The plaintiff believes that the agency may have obtained his confidential information in early 2018 from the Coinbase exchange, which, by order of the court, provided the IRS with data on 13,000 accounts. The information sent to the tax authorities included name, individual taxpayer number, place of birth, residential address, data on the user's transactions and issued orders.
The former user of the exchange said that if his guesses are correct, then we are talking about a violation of his rights, since Harper had no opportunity to challenge the seizure of his personal data. In such a case, the plaintiff will seek the IRS to delete the data on his cryptocurrency account. Harper added that if he won the case, other users who received the IRS notice could do the same.
Coinbase's legal action began back in 2016. The IRS suspected exchange users of using cryptocurrencies to avoid filing reports and paying taxes.
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