The US Supreme Court has denied an appeal from a Coinbase user, confirming the IRS's ability to access user data from the platform. This decision holds significant implications for privacy rights.
Supreme Court's Decision
On June 30, the US Supreme Court declined to hear an appeal from James Harper, a Coinbase user, regarding the legality of IRS data requests. The Court provided no detailed explanation for its decision, a common practice in such cases. Importantly, the Court did not impose any new limits on IRS data collection methods.
Case Background
Harper appealed on grounds that the IRS's sweeping demands violated his Fourth Amendment rights against unreasonable searches and seizures. The 2016 summons sought data on all Coinbase users who may have misreported crypto income. In a 2020 lawsuit, Harper claimed the request was an unreasonable search, but both District and Appeals Courts sided with the IRS, referencing the third-party doctrine, which holds that individuals have no reasonable expectation of privacy when providing information to third parties.
Implications for Privacy Rights
With the Supreme Court declining to hear the case, Harper has exhausted all legal avenues. This outcome reaffirms the IRS's authority to obtain user data from centralized exchanges without the need for individualized warrants. Legal experts warn that this decision may further normalize expansive government surveillance powers across financial and tech platforms.
The Supreme Court's ruling in James Harper's case strengthens the IRS's position on data collection and may have long-term ramifications for user privacy rights in the digital age.
