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Tag: Fourth Amendment

The IRS Believes All Bitcoin Users are Tax Cheats – Article by Jim Harper

The IRS Believes All Bitcoin Users are Tax Cheats – Article by Jim Harper

The New Renaissance HatJim Harper
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The Internal Revenue Service has filed a “John Doe” summons seeking to require U.S. Bitcoin exchange Coinbase to turn over records about every transaction of every user from 2013 to 2015. That demand is shocking in sweep, and it includes: “complete user profile, history of changes to user profile from account inception, complete user preferences, complete user security settings and history (including confirmed devices and account activity), complete user payment methods, and any other information related to the funding sources for the account/wallet/vault, regardless of date.” And every single transaction:

All records of account/wallet/vault activity including transaction logs or other records identifying the date, amount, and type of transaction (purchase/sale/exchange), the post transaction balance, the names or other identifiers of counterparties to the transaction; requests or instructions to send or receive bitcoin; and, where counterparties transact through their own Coinbase accounts/wallets/vaults, all available information identifying the users of such accounts and their contact information.

The demand is not limited to owners of large amounts of Bitcoin or to those who have transacted in large amounts. Everything about everyone.

Equally shocking is the weak foundation for making this demand. In a declaration submitted to the court, an IRS agent recounts having learned of tax evasion on the part of one Bitcoin user and two companies. On this basis, he and the IRS claim “a reasonable basis for believing” that all U.S. Coinbase users “may fail or may have failed to comply” with the internal revenue laws.

If that evidence is enough to create a reasonable basis to believe that all Bitcoin users evade taxes, the IRS is entitled to access the records of everyone who uses paper money.

Anecdotes and online bragodaccio about tax avoidance are not a reasonable basis to believe that all Coinbase users are tax cheats whose financial lives should be opened to IRS investigators and the hackers looking over their shoulders. There must be some specific information about particular users, or else the IRS is seeking a general warrant, which the Fourth Amendment denies it the power to do.

Speaking of the Fourth Amendment, that rock-bottom “reasonable basis” standard is probably insufficient. Americans should and probably do have Fourth Amendment rights in information they entrust to financial services providers required by contract to keep it confidential. Observers of Fourth Amendment law know full-well that the “third-party doctrine,” which cancels Fourth Amendment interests in shared information, is in retreat.

The IRS’s effort to strip away the privacy of all Coinbase users is more broad than the government’s effort in recent cases dealing with cell site location information. In the CSLI cases, the government has sought data about particular suspects, using a standard below the probable cause standard required by the Fourth Amendment (“specific and articulable facts showing that there are reasonable grounds to believe”).

In United States v. Benbow, we argued to the D.C. Circuit that people retain a property right in information they share with service providers under contractual privacy obligations. This information is a “paper or effect” for purposes of the Fourth Amendment. Accordingly, a probable cause standard should apply to accessing that data.

Again, the government in the CSLI cases sought information about the cell phone use of particular suspects, and that is controversial enough given the low standard of the Stored Communications Act. Here, the IRS is seeking data about every user of Bitcoin, using a standard that’s even lower.

Coinbase’s privacy policy only permits it to share user information with law enforcement when it is “compelled to do so.” That implies putting up a reasonable fight for the interests of its users. Given the low standard and the vastly overbroad demand, Coinbase seems obligated to put up that fight.

Jim Harper is a senior fellow at the Cato Institute, working to adapt law and policy to the information age in areas such as privacy, cybersecurity, telecommunications, intellectual property, counterterrorism, government transparency, and digital currency. A former counsel to committees in both the U.S. House and the U.S. Senate, he went on to represent companies such as PayPal, ICO-Teledesic, DigitalGlobe, and Verisign, and in 2014 he served as Global Policy Counsel for the Bitcoin Foundation.

Harper holds a JD from the University of California–Hastings College of Law.

This work by Cato Institute is licensed under a Creative Commons Attribution-NonCommercial-ShareAlike 3.0 Unported License. Read the original article.

If You Want Security, Pursue Liberty – Article by Ron Paul

If You Want Security, Pursue Liberty – Article by Ron Paul

The New Renaissance HatRon Paul
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Judging by his prime-time speech in early December 2015, the final year of Barack Obama’s presidency will be marked by increased militarism abroad and authoritarianism at home. The centerpiece of the president’s speech was his demand for a new law forbidding anyone on the federal government’s terrorist watch list from purchasing a firearm. There has never been a mass shooter who was on the terrorist watch list, so this proposal will not increase security. However, it will decrease liberty.

Federal officials can have an American citizen placed on the terrorist watch list based solely on their suspicions that the individual might be involved in terrorist activity. Individuals placed on the list are not informed that they have been labeled as suspected terrorists, much less given an opportunity to challenge that designation, until a Transportation Security Administration agent stops them from boarding a plane.

Individuals can be placed on the list if their Facebook or Twitter posts seem “suspicious” to a federal agent. You can also be placed on the list if your behavior somehow suggests that you are a “representative” of a terrorist group (even if you have no associations with any terrorist organizations). Individuals can even be put on the list because the FBI wants to interview them about friends or family members!

Thousands of Americans, including several members of Congress and many employees of the Department of Homeland Security, have been mistakenly placed on the terrorist watch list. Some Americans are placed on the list because they happen to have the same names as terrorist suspects. Those mistakenly placed on the terrorist watch list must go through a lengthy “redress” process to clear their names.

It is likely that some Americans are on the list solely because of their political views and activities. Anyone who doubts this should consider the long history of federal agencies, such as the IRS and the FBI, using their power to harass political movements that challenge the status quo. Are the American people really so desperate for the illusion of security that they will support a law that results in some Americans losing their Second Amendment rights because of a bureaucratic error or because of their political beliefs?

President Obama is also preparing an executive order expanding the federal background check system. Expanding background checks will not keep guns out of the hands of criminals or terrorists. However, it will make obtaining a firearm more difficult for those needing, for example, to defend themselves against abusive spouses.

Sadly, many who understand that new gun-control laws will leave us less free and less safe support expanding the surveillance state. Like those promoting gun control, people calling for expanded surveillance do not let facts deter their efforts to take more of our liberties. There is no evidence that mass surveillance has prevented even one terrorist attack.

France’s mass-surveillance system is much more widespread and intrusive than ours. Yet it failed to prevent the recent attacks. France’s gun-control laws, which are much more restrictive than ours, not only failed to keep guns out of the hands of their attackers, they left victims defenseless. It is thus amazing that many American politicians want to make us more like France by taking away our Second and Fourth Amendment rights.

Expanding the federal government’s power will not increase our safety; it will only diminish our freedom. Americans will have neither liberty nor security until they abandon the fantasy that the US government can provide economic security, personal security, and global security.

Ron Paul, MD, is a former three-time Republican candidate for U. S. President and Congressman from Texas.

This article is reprinted with permission from the Ron Paul Institute for Peace and Prosperity.

Why The 2,776 NSA Violations Are No Big Deal – Article by Ron Paul

Why The 2,776 NSA Violations Are No Big Deal – Article by Ron Paul

The New Renaissance Hat
Ron Paul
August 18, 2013
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Thanks to more documents leaked by Edward Snowden, this time to the Washington Post, we learned last week that a secret May 2012 internal audit by the NSA revealed 2,776 incidents of “unauthorized” collection of information on American citizens over the previous 12 months. They are routinely breaking their own rules and covering it up.The Post article quotes an NSA spokesman assuring the paper that the NSA attempts to identify such problems “at the earliest possible moment.” But what happened to all those communications intercepted improperly in the meantime? The answer is, they were logged and stored anyway.

We also learned that the NSA routinely intercepts information from Americans while actually targeting foreigners, and that this is not even considered a violation. These intercepts are not deleted once discovered, even though they violate the US government’s own standards. As the article reports, “once added to its databases, absent other restrictions, the communications of Americans may be searched freely.”

The Post article quotes an NSA official explaining that the thousands of unauthorized communications intercepts yearly are relatively insignificant. “You can look at it as a percentage of our total activity that occurs each day. You look at a number in absolute terms that looks big, and when you look at it in relative terms, it looks a little different.”

So although the numbers of Americans who have had their information intercepted in violation of NSA’s own rules seems large, it is actually miniscule compared to the huge volume of our communications they intercept in total!

Though it made for a sensational headline last week, the fact is these 2,776 “violations” over the course of one year are completely irrelevant. The millions and millions of “authorized” intercepts of our communications are all illegal — except for the very few carried out in pursuit of a validly-issued search warrant in accordance with the Fourth Amendment. That is the real story. Drawing our attention to the violations unfortunately sends the message that the “authorized” spying on us is nothing to be concerned about.

When information about the massive NSA domestic spying program began leaking earlier in the summer, Deputy Attorney General James Cole assured us of the many levels of safeguards to prevent the unauthorized collection, storage, and distribution of our communications. He promised to explain the NSA’s record “in as transparent a way as we possibly can.”

Yet two months later we only discover from more leaked documents the thousands of times communications were intercepted in violation of their own standards! It is hardly reassuring, therefore, when they promise us they will be more forthcoming in the future. No one believes them because they have lied and covered up continuously. The only time any light at all is shone on these criminal acts by the US federal government is when a whistleblower comes forth with new and ever more disturbing information.

Americans are increasingly concerned over these violations of their privacy. Calls for reform grow. However, whenever Washington finds itself in a scandal, the federal government responds by naming a federal-government panel made up of current and former federal employees to investigate any mistakes the federal government might have made. The recommendations invariably are that even more federal government employees must be hired to provide an additional layer or two of oversight. That is supposed to reassure us that reforms have been made, while in fact it is just insiders covering up for those who have hired them to investigate.

Let us hope the American people will decide that such trickery is no longer acceptable. It is time to take a very serious look at the activities of the US intelligence community. The first step would be a dramatic reduction in appropriations to force a focus on those real, not imagined, threats to our national security. We should not be considered the enemy.

Ron Paul, MD, is a former three-time Republican candidate for U. S. President and Congressman from Texas.

This article is reprinted with permission.

A House Divided Over NSA Spying on Americans – Article by Ron Paul

A House Divided Over NSA Spying on Americans – Article by Ron Paul

The New Renaissance Hat
Ron Paul
August 10, 2013
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In late July 2013, the House debate on the Defense Appropriations bill for 2014 produced a bit more drama than usual. After hearing that House leadership would do away with the traditional “open rule” allowing for debate on any funding limitation amendment, it was surprising to see that Rep. Justin Amash’s (R-MI) amendment was allowed on the Floor. In the wake of National Security Agency (NSA) whistleblower Edward Snowden’s revelations about the extent of US government spying on American citizens, Amash’s amendment sought to remove funding in the bill for some of the NSA programs.

Had Amash’s amendment passed, it would have been a significant symbolic victory over the administration’s massive violations of our Fourth Amendment protections. But we should be careful about believing that even if it had somehow miraculously survived the Senate vote and the President’s veto, it would have resulted in any significant change in how the Intelligence Community would behave toward Americans. The US government has built the largest and most sophisticated spying apparatus in the history of the world.

The NSA has been massively increasing the size its facilities, both at its Maryland headquarters and in its newly built (and way over-budget) enormous data center in Utah. Taken together, these two facilities will be seven times larger than the Pentagon! And we know now that much of the NSA’s capacity to intercept information has been turned inward, to spy on us.

As NSA expert James Bamford wrote earlier this year about the new Utah facility:

“The heavily fortified $2 billion center should be up and running in September 2013. Flowing through its servers and routers and stored in near-bottomless databases will be all forms of communication, including the complete contents of private emails, cell phone calls, and Google searches, as well as all sorts of personal data trails—parking receipts, travel itineraries, bookstore purchases, and other digital “pocket litter.” It is, in some measure, the realization of the “total information awareness” program created during the first term of the Bush administration—an effort that was killed by Congress in 2003 after it caused an outcry over its potential for invading Americans’ privacy.”

But it happened anyway.

In late July we have seen two significant prison-breaks, one in Iraq, where some 500 al-Qaeda members broke out of the infamous Abu Ghraib prison, which the US built, and another 1,000 escaped in a huge break in Benghazi, Libya – the city where the US Ambassador was killed by the rebels that the US government helped put in power. Did the US intelligence community, focused on listening to our phone calls, not see this real threat coming?

Rep. Amash’s amendment was an important move to at least bring attention to what the US intelligence community has become: an incredibly powerful conglomeration of secret government agencies that seem to view Americans as the real threat. It is interesting that the votes on Amash’s amendment divided the House not on party lines. Instead, we saw the votes divided between those who follow their oath to the Constitution, versus those who seem to believe that any violation of the Constitution is justified in the name of the elusive “security” of the police state at the expense of liberty. The leadership – not to my surprise — of both parties in the House voted for the police state.

It is encouraging to see the large number of votes crossing party lines in favor of the Amash amendment. Let us hope that this will be a growing trend in the House – perhaps the promise that Congress may once again begin to take its duties and obligations seriously. We should not forget, however, that in the meantime another Defense Appropriations bill passing really means another “military spending” bill. The Administration is planning for a US invasion of Syria, more military assistance to the military dictatorship in Egypt, and more drones and interventionism. We have much work yet to do.

Ron Paul, MD, is a former three-time Republican candidate for U. S. President and Congressman from Texas.

This article is reprinted with permission.

Why Won’t They Tell Us the Truth About NSA Spying? – Article by Ron Paul

Why Won’t They Tell Us the Truth About NSA Spying? – Article by Ron Paul

The New Renaissance Hat
Ron Paul
August 10, 2013
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In 2001, the Patriot Act opened the door to US government monitoring of Americans without a warrant. It was unconstitutional, but most in Congress over my strong objection were so determined to do something after the attacks of 9/11 that they did not seem to give it too much thought. Civil liberties groups were concerned, and some of us in Congress warned about giving up our liberties even in the post-9/11 panic. But at the time most Americans did not seem too worried about the intrusion.
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This complacency has suddenly shifted given recent revelations of the extent of government spying on Americans. Federal politicians and bureaucrats are faced with serious backlash from Americans outraged that their most personal communications are intercepted and stored. They had been told that only the terrorists would be monitored. In response to this anger, defenders of the program have time and again resorted to spreading lies and distortions. But these untruths are now being exposed very quickly.

In a Senate hearing this March, Director of National Intelligence James Clapper told Senator Ron Wyden that the NSA did not collect phone records of millions of Americans. This was just three months before the revelations of an NSA leaker made it clear that Clapper was not telling the truth. Pressed on his false testimony before Congress, Clapper apologized for giving an “erroneous” answer but claimed it was just because he “simply didn’t think of Section 215 of the Patriot Act.” Wow.

As the story broke in June of the extent of warrantless NSA spying against Americans, House Intelligence Committee Chairman Mike Rogers assured us that the project was a strictly limited and not invasive. He described it as a “lockbox with only phone numbers, no names, no addresses in it, we’ve used it sparingly, it is absolutely overseen by the legislature, the judicial branch and the executive branch, has lots of protections built in…”

But we soon discovered that also was not true either. We learned in another Guardian newspaper article last week that the top secret “X-Keyscore” program allows even low-level analysts to “search with no prior authorization through vast databases containing emails, online chats and the browsing histories of millions of individuals.”

The keys to Rogers’ “lockbox” seem to have been handed out to everyone but the janitors! As Chairman of the Committee that is supposed to be most in the loop on these matters, it seems either the Intelligence Community misled him about their programs or he misled the rest of us. It sure would be nice to know which one it is.

Likewise, Rep. Rogers and many other defenders of the NSA spying program promised us that this dragnet scooping up the personal electronic communications of millions of Americans had already stopped “dozens” of terrorist plots against the United States. In June, NSA director General Keith Alexander claimed that the just-disclosed bulk collection of Americans’ phone and other electronic records had “foiled 50 terror plots.”

Opponents of the program were to be charged with being unconcerned with our security.

But none of it was true.

On August 3, 2013, the Senate Judiciary Committee heard dramatic testimony from NSA deputy director John C. Inglis. According to the Guardian:

“The NSA has previously claimed that 54 terrorist plots had been disrupted ‘over the lifetime’ of the bulk phone records collection and the separate program collecting the internet habits and communications of people believed to be non-Americans. On Wednesday, Inglis said that at most one plot might have been disrupted by the bulk phone records collection alone.”

From dozens to “at most one”?

Supporters of these programs are now on the defensive, with several competing pieces of legislation in the House and Senate seeking to rein in an administration and intelligence apparatus that is clearly out of control. This is to be commended. What is even more important, though, is for more and more and more Americans to educate themselves about our precious liberties and to demand that their government abide by the Constitution. We do not have to accept being lied to – or spied on — by our government.

Ron Paul, MD, is a former three-time Republican candidate for U. S. President and Congressman from Texas.

This article is reprinted with permission.

Restore the Fourth – Protest Against NSA Surveillance – Carson City Interviews – Video by G. Stolyarov II

Restore the Fourth – Protest Against NSA Surveillance – Carson City Interviews – Video by G. Stolyarov II

Mr. Stolyarov interviews attendees at the Restore the Fourth rally against NSA surveillance in Carson City, NV, on July 4, 2013. This successful protest is the beginning of what will hopefully become a major movement to regain essential individual freedoms and to roll back infringements upon Americans’ (and most human beings’) essential private spheres.

Thanks go to Larry Rubald for filming and for organizing the event.

NOTE: Apologies for the traffic noise obstructing some of the words. Full captions are now available. Thank you for your patience.

References
Restore the Fourth: Upholding the Meaning of the 4th Amendment – Video by G. Stolyarov II
Video: Several protest government snooping on Fourth of July in Carson City – Reno Gazette-Journal – July 4, 2013

Restore the Fourth: Upholding the Meaning of the 4th Amendment – Video by G. Stolyarov II

Restore the Fourth: Upholding the Meaning of the 4th Amendment – Video by G. Stolyarov II

Mr. Stolyarov discusses his experiences at the July 4, 2013, Restore the Fourth protest in Carson City, in opposition to the unconstitutional surveillance by the National Security Agency. He also expresses the need for more Americans to speak out and unambiguously state their disapproval of the Orwellian surveillance society that the NSA has put in place.

The protest went as smoothly as possible. It was civil and peaceful, and received general public support.

More videos from the protest are to come!

Reference
– “Video: Several protest government snooping on Fourth of July in Carson City” – Reno Gazette-Journal – July 4, 2013