Coinbase CEO Responds to IRS Summons with Alternative Option

56033753 - notepad with sign owe taxes on a wooden background.

 

Coinbase co-founder and CEO Brian Armstrong published an online post on Medium this weekend to explain his company’s position on the ongoing battle with the Internal Revenue Service (IRS) over the tax agency’s effort to access information about Coinbase customers. He also took the opportunity to offer another option that would negate the need for the John Doe Summons by issuing all Coinbase customers a 1099-B at the end of each year.

As Armstrong writes in his post:

“Since the IRS routinely processes 1099 forms, I suspect that this data would be easier to ingest compared to hundreds of gigabytes of unstructured data turned over in a subpoena. We’d be happy to do the work of structuring this data into a standard format to make it easier to use.”

The Coinbase CEO notes that his company shares the same objective as the IRS, and is committed to ensuring that digital currency users pay any taxes that they might owe. The company’s disagreement is with the way that the IRS is attempting to achieve that objective, since the agency's goals can be accomplished without sacrificing customers’ personal privacy and account transaction details. As Armstrong reminds readers, that subpoena is not limited to financial details that might help to uncover tax evasion but also includes details like IP addresses, customer support transcripts, and transaction histories.

In the end, Armstrong seems to doubt that the IRS will be willing to compromise on its summons, and instead appears to be resigned to the idea that Coinbase will be forced to engage in an expensive court battle to defend its customers’ privacy. Still, his statement clearly indicates that he would prefer to avoid that option:

“My hope is that the IRS is willing to work with us to establish a sensible reporting mechanism, like the 1099 reporting that all brokerage services like Fidelity and Charles Schwab use. A protracted legal battle, seeking to reveal private information from people who are not evading taxes, would be bad for Coinbase, the IRS, and many U.S. citizens.”

The views expressed by the authors on this site do not necessarily represent the views of DCEBrief or the management team.

Author: Ken Chase

Freelance writer whose interests include topics ranging from technology and finance to politics, fitness, and all things canine. Aspiring polymath, semi-professional skeptic, and passionate advocate for the judicious use of the Oxford comma.

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