Coinbase Urges High Court to Hear Client’s Tax Privacy Suit (2)

Coinbase Inc. asked the US Supreme Court on Wednesday to hear a case brought by one of its clients, which challenges the IRS’s demand for cryptocurrency records held by the digital asset exchange.

James Harper, who traded cryptocurrency through Coinbase, asked the high court to review his claim that he possessed a reasonable expectation of privacy using the company’s platform that was violated by an unreasonable IRS summons. The US Court of Appeals for the First Circuit sided with the government, rejecting Harper’s claims that records of his crypto transactions were his property.

Coinbase users should possess that expectation of privacy, and holding otherwise would set “a dangerous precedent” that would force the surrender of sensitive personal and financial information, the company said in an amicus brief.

“This Court should grant certiorari, restore order to the third-party doctrine that the First Circuit misapplied, and protect Americans’ privacy interests in digital information stored by third-party service providers,” Coinbase’s brief said.

The government, which must file a response by May 30, told the First Circuit that it believed virtual currency transactions hadn’t been reported properly. The agency described the sought-after records as comparable to bank records, which are subject to summons.

The IRS originally sought Coinbase user profiles, security settings, and transaction records, encompassing about 500,000 company clients, according to the amicus brief. The agency later narrowed its inquiry to the records of about 14,000 customers.

The Project for Privacy & Surveillance Accountability, a nonpartisan civil liberties advocacy group, also filed an amicus brief on Wednesday in support of Harper. Taxpayers generally possess an expectation of privacy in their digital data, especially as third-party storage of that data becomes ubiqitous in the modern economy, its brief said.

The New Civil Liberties Alliance represents Harper. Jones Day represents Coinbase. Schaerr Jaffe LLP represents PPSA.

The case is Harper v. O’Donnell, U.S., No. 24-922, amicus brief filed 4/30/25.