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Among the things Internal Revenue Service investigations can vary greatly in is their scope. Investigation scope has become a major issue in an IRS probe that has been getting a good deal of attention in the news.
The investigation in question is a probe the IRS is engaging in relation to the digital currency bitcoin. Last year, the IRS issued a demand to the digital currency exchange Coinbase to allow the agency access to information on all customer account activity covering the period from 2013 to 2015.
Since the request was made, multiple parties have expressed concerns over the broadness of the IRS’ request, including Coinbase, some of its customers and certain members of Congress. In connection to such complaints, there have been calls for the IRS to narrow the scope of its demands.
There have been some legal actions taken in relation to the probe. This includes some customers of Coinbase making a request to a court to be allowed to bring a challenge to the IRS’s demands.
There has been an indication that the IRS is narrowing the scope of its demands to a small degree. Specifically, the IRS recently said it would no longer be including password and security settings among the account information it is demanding from Coinbase.
One wonders if the scope of the IRS’s bitcoin probe will be narrowed even further in the future and what will ultimately happen in the debate and legal actions related to this probe.
What scope an IRS probe has can have all kinds of ramifications. It can impact how many people an investigation ends up affecting. It can also affect how big of an impact the probe has on the lives of the individuals the probe touches on.
So, how a taxpayer responds when they suspect an IRS probe is getting too broad in scope and is being unnecessarily disruptive in their life can be very important. Skilled attorneys can advise taxpayers who are in such a situation on what options they have related to the probe and trying to minimize the effect of the probe on their life.
Source: Fortune, “IRS Says It Will Limit Bitcoin Audits–But Only a Bit,” Jeff John Roberts, July 6, 2017