Coinbase User’s Privacy Appeal Faces US Supreme Court Hurdle in IRS Crypto Tax Dispute

The US government has urged the Supreme Court to reject a petition from Coinbase user James Harper, who is attempting to prevent the IRS from accessing his cryptocurrency transaction records. Solicitor General D. John Sauer’s filing argues that Harper’s financial data, shared voluntarily with the exchange, does not qualify for Fourth Amendment protections. This case originates from a 2016 IRS investigation that uncovered widespread underreporting of crypto transactions, highlighting the ongoing tension between privacy rights and tax enforcement in the digital asset space.

US Supreme Court Urged to Reject Coinbase User’s Privacy Appeal in IRS Crypto Tax Case

The US government has formally recommended the Supreme Court deny a petition from Coinbase user James Harper, who seeks to block IRS access to his cryptocurrency transaction records. Solicitor General D. John Sauer’s May 30 filing contends Harper lacks Fourth Amendment protections for financial data voluntarily shared with the exchange.

The case stems from a 2016 IRS probe revealing systemic underreporting of crypto gains. When the agency discovered discrepancies between Coinbase’s millions of Bitcoin traders and the handful reporting earnings, it issued a ’John Doe’ summons for large-volume customer records—a move Harper challenged as unconstitutional.

Coinbase’s privacy policy, which discloses potential law enforcement cooperation, undercuts Harper’s position. Lower courts have consistently sided with the IRS, affirming the agency’s lawful use of court-approved summons powers in tax enforcement efforts.

U.S. Government Urges Supreme Court to Dismiss Coinbase User Privacy Lawsuit

The U.S. government has recommended the Supreme Court reject a privacy lawsuit involving Coinbase and the Internal Revenue Service. The case stems from James Harper, a cryptocurrency trader who challenged IRS demands for user data from the exchange. Legal observers view this as a pivotal test of financial privacy rights in the digital asset era.

Coinbase finds itself again at the intersection of regulatory scrutiny and user protections. The outcome could establish precedent for how exchanges balance compliance with customer confidentiality. Market participants are monitoring whether the court will prioritize tax enforcement or establish safeguards for sensitive trading information.