About | HeinOnline Law Journal Library | HeinOnline Law Journal Library | HeinOnline

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).

What Is HeinOnline?

HeinOnline is a subscription-based resource containing nearly 3,000 academic and legal journals from inception; complete coverage of government documents such as U.S. Statutes at Large, U.S. Code, Federal Register, Code of Federal Regulations, U.S. Reports, and much more. Documents are image-based, fully searchable PDFs with the authority of print combined with the accessibility of a user-friendly and powerful database. For more information, request a quote or trial for your organization below.



Short-term subscription options include 24 hours, 48 hours, or 1 week to HeinOnline with pricing starting as low as $29.95

Contact us for annual subscription options:

Already a HeinOnline Subscriber?

profiles profiles most