Digital Finance Pioneers Using Bitcoin for Savings, Payments,…and Donations
It’s that special time of year when people think of family, friends, faith—and tax avoidance. Donations made to qualified charitable organizations during calendar year 2017 entitle you to a deduction against your income tax if you itemize in your 2017 tax filing. You can donate to CEI by going to the “Donate” link on CEI’s homepage.
The IRS has worked in 2017 to beef up its tax-related surveillance authority. In an action aimed at leading Bitcoin service provider Coinbase, it argued that the barest suspicion of tax evasion among a class of people like Bitcoin users could justify getting every iota of data about every Coinbase user.
It was a really breathtaking claim, and CEI helped fight back, submitting an amicus brief in the District Court that heard the matter. Coinbase and others ably argued that the theory on which the IRS was acting would give it carte blanche to hoover up data just about anywhere money changes hands. We emphasized that Coinbase users have a property right in their data even though it’s held by Coinbase, and that Coinbase users have a Due Process right to participate in such proceedings.
In November, the court ordered Coinbase to hand over a much smaller dataset about users with trades of $20,000-worth or more during the 2013 to 2015 period. That’s a little over 14,000 accounts, as opposed to the millions of people’s records the IRS originally sought. Coinbase’s last word is that they were considering their next steps and that they would give affected users notice before handing over their records.
It’s not just the IRS. The government’s financial surveillance regime imposes huge costs on fledgling Bitcoin businesses—and the financial services industry generally. A number of different regulators are working to get Bitcoin under their yokes. They are impeding innovation and progress.
In the coming year, we’re very hopeful that we can do more to expose where Bitcoin and financial services regulation have gone wrong. Your support for the Competitive Enterprise Institute, given in Bitcoin or dollars, can help us strengthen the hand of the businesses that offer a revolution in money and finance to a world that badly needs it. Once again, you can donate to CEI by going to the “Donate” link on CEI’s homepage.