The Internal Revenue Service won a victory this week in its battle to force Coinbase to provide information about the company’s customers. On Tuesday, a judge issued an order requiring the digital currency exchange to hand over details that identify a total of 14,355 customer accounts – information that the tax agency hopes will help it to collect any unpaid back taxes related to those customers’ Bitcoin transactions.
While the agency had initially demanded that Coinbase provide account and personal information for every customer who made digital currency transactions in the years 2013, 2014, and 2015, it later narrowed that demand to those customers whose transactions totaled at least $20,000. Coinbase had argued against even that more limited request, but the court found the exchange’s arguments unpersuasive.
However, the ruling was not a complete victory for the agency. Though the judge did order Coinbase to comply with the revised summons, the IRS will not be gaining access to all of the information that it had initially demanded. According to the text of the order:
“Coinbase is ORDERED to produce the following documents for accounts with at least the equivalent of $20,000 in any one transaction type (buy, sell, send, or receive) in any one year during the 2013 to 2015 period:
(1) the taxpayer ID number,
(3) birth date,
(4) records of account activity including transaction logs or other records identifying the date, amount, and type of transaction (purchase/sale/exchange), the post transaction balance, and the names of counterparties to the transaction, and
(5) all periodic statements of account or invoices (or the equivalent)."
In its ruling, the Court denied the government’s demands for additional customer information, including any Know-Your-Customers records on file, company correspondence with users and third parties, and any third-party instructions or agreements that users may have executed to provide others access to their accounts.