The IRS gets approval to request information about users’ assets forms Bitstamp, by US federal judge, whilst it was ordered to the agency to reduce the number of demands. As we are reading further in the crypto news.
The involvement of the IRS with the cryptocurrency market is increasing continuously. This has irritated a large part of the crypto community. The irritation of the crypto community went so far that one Washington resident requested the Washington Couty District Court to ask for a court order that can stop the IRS from getting the information of the users’ details.
But the US court rejected the request, and now IRS gets the approval to continue stockpiling data, however ordering the Internal Revenue Service to reduce the number of requests. Two arguments were presented to the court by the resident of Washington, William Zietzke.
The constitutional right of the crypto user to financial integrity was the first, and that third parties (such as the IRS) should not be trusted with protecting the personal information of exchanges’ users was the second argument. Having the IRS efforts to check the Bitstamp’s transactions and other data, Zeitzke tried to cancel the agency’s disclosure requests for the crypto exchange company. He reported a capital gain of $104,482 back in 2016 but realized that two of the crypto transactions earned him the largest amount but never actually happened in 2016.
Instead, the real capital gain for Zeitzke from 2016 was only $410. He then requested from the agency return of the taxes he paid, which instigated the IRS to demand information from Bitstamp. Zeitzke then reasoned that the agency had all the data it needed and that they did not take the proper administrative procedure that is required by the law.
It is not new news that the IRS has cryptocurrency interests, particularly when there is the question of possible tax evasion. Some days ago, Bitcoinist reported the IRS stated that Bitcoin ATMs and kiosks should be regulated like any exchange.
There was even an attempt by the IRS to publish guidance regarding the tax treatment of cryptocurrencies, though its failure to include De Minimis Exception was heavily criticized. The explanation of De minimis Exception absence was that it would have only considerably burdened the agency.
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