If the internal revenue service (IRS) of the united States wins the legal battle that has remained with William Zietzke from the year 2017, the privacy of thousands of holders of bitcoin would be compromised.The story of William Zietzke, a systems engineer who mined bitcoins in 2011 as an experiment, evidence of what could be the plans of the Internal revenue Service of the united States or IRS for all users of the cryptocurrencies in the future. It all started when in the 2017 Zietzke made a mistake in their declaration of income taxes, to indicate the gains from their holdings in cryptocurrencies in 2016, on your tax return for the year 2017.According to the account published in Reason.com, then hire an accountant in the year 2017, it was that the user was able to realize his mistake. Faced with this situation, Zietzke did the only thing that was in their hands, amended his declaration, by eliminating USD 104.482 in capital gains, and causing a refund of USD 15.475. “I had never been in this situation, I made a mistake. Those who play these games tax optimization understand how to dot every I and cross every T, and I didn’t do it”, account Zietzke.The refund was what caught the attention of the IRS, so that immediately audited Zietzke, who had declared their income in bitcoins since 2013. Well, took the lead in the field of tax on holdings in cryptocurrencies, because the IRS issued the guidelines on the taxation of bitcoin in the year 2014. Although from the beginning the audit process was complicated, Zietzke gave the body a large amount of information to satisfy their requirements and quickly resolve the problem.
A relentless struggle for privacy
The user delivered data of the accounting of its transactions with bitcoin taxable in 2016; – screenshots of your activity in a Purse.io and Coinbase, the log of activity of Armony, and the software used to manage some BTC. He also gave an account of bank statements to substantiate the cost basis of the bitcoins purchased through Coinbase, but the biggest mistake made by Zietzke was that it included the public addresses of their purses in the information given to the IRS.Due to the transparency of the blockchain of Bitcoin, with the public addresses anyone can monitor the movements of a user. Just enough to know who is to the address that is being monitored.After a year, Zietzke received a letter in which he said that he was not able to satisfy the requests of the IRS. It is for this reason that they issued a subpoena to the platforms, Bitstamp, Coinbase, and at the same Zietzke with the intention of receiving more than the public addresses. They were demanding the identities and addresses of the portfolio of any person with whom he had made transactions through the exchange houses.Zietzke filed motions to quash the subpoena to Bitstamp and Coinbase, and until now has refused to comply with the requirements of the IRS. According to his own words they would be giving out “surveillance perfect” their financial activity. However, the IRS insists that the only way to prove the innocence of Zietzke is to examine all the transactions of all the purses of bitcoin that possessed him in that year.Although at present this has not led to anything concrete, if the IRS gets what it wants from Zietzke, thousands of users in the united States could be in the position in which today it is found William Zietzke. It should be noted that last year the u.s. Congress required the IRS rules more clear for the criptoactivos.