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16 Duke L. & Tech. Rev. 1 (2017-2018)

handle is hein.journals/dltr16 and id is 1 raw text is: COLLECTION OF CRYPTOCURRENCY CUSTOMER-INFORMATION: TAX ENFORCEMENT MECHANISM OR INVASION OF PRIVACY? AUSTIN ELLIOTTT ABSTRACT After granting permission to the Internal Revenue Service to serve a digital exchange company a summons for user information, the Federal District Court for the Northern District of California created some uncertainty regarding the privacy of cryptocurrencies. The IRS views this information gathering as necessary for monitoring compliance with Notice 2014-21, which classifies cryptocurrencies as property for tax purposes. Cryptocurrency users, however, view the attemptfor information as an infringement on their privacy rights and are seeking legal protection. This Issue Brief investigates the future tax implications of Notice 2014-21 and considers possible routes the cryptocurrency market can take to avoid the burden of capital gains taxes. Further, this Issue Brief attempts to uncover the validity of the privacy claims made against the customer information summons and will recommend alternative actions for the IRS to take regardless of whether it succeeds in obtaining the information. INTRODUCTION On November 30, 2016, the Internal Revenue Service (IRS or the Service) received permission to summon Coinbase, a digital asset exchange company, for user information.1 The Internal Revenue Code can authorize this broad request, known as a John Doe Summons, in situations where an ascertainable group can be identified, but the IRS is not practically able to determine the identity of individuals to summon.' While Duke University School of Law, J.D. expected May 2018; University of Florida, B.A. in Accounting, May 2015. I would like to thank Erika Buell (Professor at Duke Law School), Ian Darrow (General Counsel and Chief Compliance Officer of LedgerX), and the editors of Duke Law and Technology Review for their work and support throughout the research and writing process. 1 See In re Tax Liabs. of Doe, No. 3:16-cv-06658-JSC, 2016 U.S. Dist. LEXIS 184200, at *1-2 (N.D. Cal. Nov. 30, 2016). 2 See IRM 25.5.7.2 (2016).

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