Coinbase has joined X and several U.S. states in filing briefs urging the U.S. Supreme Court to reconsider the Internal Revenue Service’s (IRS) authority to collect extensive user data from digital platforms without individual warrants or suspicion.
The exchange filed an amicus brief on behalf of James Harper, a Coinbase user, challenging the IRS’s access to his data.
Harper had discovered that the IRS had requested and gained access to his financial transaction records alongside that of over 14,000 Coinbase users through a “John Doe” summons, a type of administrative summons first issued in the 1970s that allows the agency to collect information on individuals not specifically named.
Harper sued the IRS, arguing that the summons violated his Fourth Amendment rights by seeking his personal data without a warrant or prior notice.
Coinbase joins the fight for digital privacy
According to Coinbase’s Chief Legal Officer Paul Grewal, the implications of the IRS’s actions go far beyond Harper’s individual experience and could set a dangerous precedent for unchecked surveillance.
Referring to the exchange’s amicus brief, Grewal said in a post on X, “As we explain here, you should have the same right to privacy for your inbox or account as you have for a letter in your mailbox.”
In the brief, Coinbase argues that digital financial records are particularly sensitive and that users have a reasonable expectation of privacy due to privacy agreements they enter with the platform.
It also asked that lower courts pay more attention to the scope of the John Doe summons and how it affects users in the digital age. The brief also requested that the Supreme Court clarify its position on the third-party doctrine in the digital era.
Coinbase’s concerns are also shared by Elon Musk’s X (formerly Twitter) and several U.S. states. X had filed a brief highlighting how broad government subpoenas could impact user privacy across tech platforms.
Meanwhile, a group of state attorneys general submitted their own filings asserting that the IRS’s approach violates fundamental rights.
According to Grewal, the first John Doe summons served to Coinbase in 2017 sought data on over 500,000 users. Coinbase initially pushed back, eventually limiting the scope of the IRS’s data request through litigation. However, the company’s latest filing shows it remains concerned about the legal precedent such requests create.
A battle between compliance and rights
Legal observers point out that the IRS has increasingly used John Doe summonses to track down crypto users it suspects of underreporting or evading taxes. It has also served this summons to other crypto platforms such as Kraken and Circle.
The Supreme Court hasn’t decided whether it will hear the case, but the growing support for Harper, including from private companies and state governments, has brought the spotlight to financial privacy issues and how they are managed in the digital age.
Should the court hear the case and rule in Harper’s favor, the IRS and other federal agencies may have to follow stricter standards when seeking access to user data on digital platforms.
However, a denial to hear the case may signify agreement with the government’s current approach, and this opens the door for broader surveillance of users across digital platforms.
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