Blockchain advocacy group Coin Center filed a lawsuit on Friday against the U.S. Treasury Department and the Internal Revenue Service, accusing them of drafting illegal amendments to the controversial infrastructure bill.
The lawsuit against the Treasury Department says the tax reporting requirements of the 2021 infrastructure legislation are “unconstitutional,” specifically challenging the amendment to Section 6050I of the tax code.
Under the amendments, U.S. citizens will be required to report any transaction of at least $10,000, including providing the sender’s name, Social Security number and date of birth.
“In 2021, President Biden and Congress amended a little-known tax reporting mandate. If the amendment is allowed to take effect, it would impose a system of mass surveillance on ordinary Americans […] The reporting mission would force Americans who use cryptocurrencies to share intrusive details about themselves with each other and with the federal government. Under the terms of the license, everyday senders and recipients of cryptocurrency will be forced to reveal their names, Social Security numbers, home addresses and other personally identifiable information,” the complaint reads.
Before the bill became law last year, Coin Center was part of crypto advocates who opposed some of its crypto privileges. In addition, many stakeholders at the time considered several provisions in the bill to be unconstitutional and invalid.
Since its passage, the group claims it has worked with Congress to find ways to repeal and amend certain legal provisions. In addition, some regulations will require the Treasury Department to guide their implementation.
While the bill will go into effect in 2024, the nonprofit claims it will have a significant impact on the crypto industry, including NGOs that accept anonymous donations.
Violating the Fourth Amendment?
In its complaint, Coin Center claimed that the amendment violated the Fourth Amendment and that anyone involved in crypto transactions would be subject to “unreasonable searches and seizures.”
It also pointed to a U.S. Supreme Court ruling that prevented the government from forcing organizations to keep and report their membership lists.
“Under the First Amendment, it is unconstitutional to require politically active organizations to create and report to the government lists of their donors’ names and identifying information,” the announcement reads.
The announcement also called on stakeholders in the crypto community to support the lawsuit:
“We are considering adding additional co-plaintiffs in this lawsuit, so if you may fit this description and are interested, please contact us.”
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