Coin Center Wins Right to Sue U.S. Treasury, IRS Again Over Controversial Tax Reporting Rule

4 months ago |   readers | 4 mins reading
Coin Center Wins Right to Sue U.S. Treasury, IRS Again Over Controversial Tax Reporting Rule

Crypto think tank Coin Center will get another shot at suing the U.S. Treasury Department over what it says is an “unconstitutional” amendment to the tax code that would require Americans to disclose the details of certain crypto transactions to the Internal Revenue Service (IRS).
On Aug. 9, Circuit Judge Karen Nelson Moore of the U.S. Court of Appeals for the Sixth Circuit overturned an earlier decision by a U.S. District Court Judge – Judge Karen Caldwell of the Eastern District of Kentucky – to dismiss Coin Center’s lawsuit. Caldwell agreed to dismiss the case on issues of subject matter jurisdiction last July, ruling that her court did not have the authority to decide on the issues brought forth by Coin Center’s case because they were not yet “ripe” – a legal term meaning that a plaintiff has not satisfactorily argued that real harm has occurred, only that it could hypothetically happen in the future.
The amendment to section 6050I of the U.S. code, which was enshrined in the $1.2 trillion Infrastructure Investments and Jobs Act passed in 2021, would legally require crypto users exchanging digital assets worth more than $10,000 to collect and share personal information – including their real names, Social Security numbers and home addresses – with both each other and the authorities.
The amendment sparked a public outcry from many in the crypto industry, who saw the requirement as being antithetical to the ethos of crypto, where many users are pseudonymous, as well as a violation of their privacy and a potential government overreach.
Coin Center filed suit against the Treasury Department and the IRS in June 2022, arguing that the amendment represented “overbearing surveillance” that would infringe on numerous constitutional rights, including the First Amendment right to expression and associational privacy.
The Circuit Court’s Moore ruled that some of Coin Center’s privacy concerns were not yet ripe, writing “We cannot invalidate 6050I based on scenarios that may never come to pass. Nor do we have authority to opine generally on its constitutionality.”
But she found that Coin Center did, in fact, have three claims – on Fourth Amendment, First Amendment, and enumerated powers (essentially, a question about the government’s authority as granted by Congress) – that were “ripe” enough to try in court.
“Plaintiffs’ enumerated-powers claim is clearly ripe,” Moore wrote in her judgment. “The enumerated-powers claim presents an exceedingly simple, pure legal issue: either Congress exceeded the powers given to it by the Constitution or it did not … [I]t was ripe the moment Congress passed the law.”
Moore’s partial reversal of Caldwell’s ruling means that the suit has been remanded back down to a lower court for fresh proceedings “consistent with [her] opinion.”
Peter Van Valkenburgh, Coin Center’s director of research, celebrated the legal victory in a Monday blog post, writing:
“The privacy of those associations, the names and personal information of Americans who support our mission through donations is our constitutional right, and we’re excited to move forward defending that right on the merits.”
Neither the Treasury nor the IRS responded to CoinDesk’s request for comment.
Edited by Nikhilesh De.
Disclosure
Please note that our privacy policy, terms of use, cookies, and do not sell my personal information has been updated.CoinDesk is an award-winning media outlet that covers the cryptocurrency industry. Its journalists abide by a strict set of editorial policies. In November 2023, CoinDesk was acquired by the Bullish group, owner of Bullish, a regulated, digital assets exchange. The Bullish group is majority-owned by Block.one; both companies have interests in a variety of blockchain and digital asset businesses and significant holdings of digital assets, including bitcoin. CoinDesk operates as an independent subsidiary with an editorial committee to protect journalistic independence. CoinDesk employees, including journalists, may receive options in the Bullish group as part of their compensation.
Cheyenne Ligon is a CoinDesk news reporter with a focus on crypto regulation and policy. She has no significant crypto holdings.

This article is originated from the source

CoinDesk
Read Full Article
Published on Other News Site
cointelegraph Badgebitcoin Badgedecrypt Badgecryptonews Badgeu Badgebeincrypto Badgeblockworks Badgecoincodex Badge