November 28, 2016

Ed Wilson quoted in American Banker on IRS request for bitcoin user data

1 min

Venable partner Ed Wilson was quoted in a November 28, 2016, American Banker article on an IRS request for user data from a bitcoin exchange. Using a procedure known as a John Doe summons, the IRS asked a federal court in California to approve its request for a bitcoin exchange to turn over records of users who made digital currency transactions between 2013 and 2015. While the request is expected to test the boundaries between compliance and customer privacy, it also provides the IRS with an opportunity to understand the prevalence of digital currency in tax evasion.

The IRS has "two different things in mind," according to Wilson. "One is to try to gain a sense of the size of the market, and the other is to get a sense of what percentage of that market is filing tax returns, disclosing their digital currency transactions. That's not fishing. That's trying to get a handle on the market." Wilson also noted, "The IRS has a habit of spreading out its compliance activities across all levels of income. If you applied that theory to what's going on here, you're likely to see the small trader as well as the large trader be caught somewhere along this system."