16-6-2025 – The United States Supreme Court is being urged to intervene in a case that pits the Internal Revenue Service (IRS) against the constitutional rights of cryptocurrency users. The case, known as Harper v. Faulkender, has ignited a fierce debate over the boundaries of government authority in the digital age, with profound implications for millions who rely on virtual currencies.
The IRS, Coinbase, and the controversial ‘John Doe’ summons
At the heart of this legal storm is James Harper, a diligent Coinbase user who was blindsided by a letter from the IRS revealing that his private financial transactions had been seized. Harper, who meticulously declared his cryptocurrency holdings and paid his taxes, was one of over 14,000 users whose data was swept up by the IRS without a warrant or any specific allegation of misconduct. The agency justified its actions through a “John Doe” summons, a mechanism designed to root out tax evasion by unidentified individuals, but critics argue it was wielded far too broadly in this instance.
The third-party doctrine: outdated or essential?
The crux of the controversy hinges on the “third-party doctrine,” a legal principle that permits government access to data held by companies like Coinbase without direct consent from users. Yet, in an era where sharing personal information is a prerequisite for engaging with digital platforms, many contend this doctrine is outdated and fails to safeguard fundamental privacy rights. The New Civil Liberties Alliance (NCLA), alongside esteemed lawyer Kannon Shanmugam, is championing Harper’s cause, imploring the Supreme Court to scrutinise the IRS’s actions and reaffirm protections against unchecked state intrusion.
Thus far, lower courts have upheld the IRS’s position, asserting that users surrender their privacy expectations when entrusting data to third-party platforms. However, the escalating significance of this case has propelled it to the nation’s highest judicial authority. Should the Supreme Court choose to hear Harper v. Faulkender, its ruling could redefine the delicate balance between governmental oversight and individual privacy, setting a precedent that resonates far beyond the realm of cryptocurrency.
