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A closely-watched fight between the Internal Revenue Service and a popular bitcoin exchange took a new twist last week, as senior Republicans in Congress sent a sharply-worded letter that suggests the tax agency is overstepping its powers.

The letter concerns an IRS investigation into possible tax evasion by customers who use Coinbase, a San Francisco-based company that many people use to buy digital currencies. As part of the investigation, which began last year, officials demanded that Coinbase turn over information for every one of its accounts.

Coinbase and its customers are currently in court trying to block the demand, saying it's too broad, and now the letter from the Republicans is likely to give them extra ammunition.

"The summons is estimated to affect 500,000 active Coinbase customers and would result in the production of millions of pages of associated records, many of which contain personally identifiable information ... Based on the information before us, this summons seems overly broad, extremely burdensome, and highly intrusive to a large population of individuals ," says the letter, which is signed by Sen. Orrin Hatch (R-Ut), Chairman of the Senate Finance Committee, and by Vern Buchanan and Kevin Brady, who head the House Committee on Ways and Means. (my emphasis)

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The Republicans' concerns echo those of Coinbase and its customers, who argue the IRS does not need every single Coinbase account to carry out its audit, and that the investigation sweeps in people who have clearly done nothing wrong.

The tax agency, for its part, has pointed out that only 802 Coinbase users filed a tax form related to bitcoin in 2015, which suggests large number of people have failed to declare capital gains related to bitcoin.

The IRS investigation also comes at a time when the price of bitcoin has been on an incredible tear, climbing from $13 in 2013 to a new high of over $2,000 last week. Those who profited from the higher priceseither by selling bitcoin for dollars or exchanging it for merchandiseare required to pay taxes on the gain.

Some Coinbase customers, however, have not sold any bitcoin at all while many others hold only a minimal amount, raising questions of why the IRS demanded information about every account.

One theory, according to a lawyer who spoke with Fortune late last year, is that the IRS's sweeping demand is a negotiating tactic to make Coinbase more cooperative, and that the two sides will reach an agreement to allow the agency to inspect some, but not all, of the accounts.

The letter from the Republicans, which asks the IRS to explain its strategy for enforcing tax payments on digital currency by June 7, is likely to put pressure on the agency to come to a deal with Coinbase.

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IRS Probe of Bitcoin Goes Too Far, GOP Warns - Fortune

To the editor: Republicans need to tell President Trump that for the good of the country its time for him to go. The political and security crises of these last two weeks alone have deeply wounded his presidency, and they were all self-inflicted. (Republicans need to screw up their courage and tell Trump to go, Opinion, May 17)

But Vice President Mike Pence, who would succeed Trump, is subject to concern over his integrity and complicity in these scandals. As conservative commentator Bill Kristol said in January, Trump corrupts, meaning those intimately involved with Trump and his presidential campaign will forever operate under a poisonous cloud of association with him.

House Speaker Paul Ryan (R-Wis.) would be in line for the presidency after Pence, and now a secret recording of him silencing his fellow Republicans from chattering about Trump and Russia taints him too.

Walter Dominguez, Los Angeles

..

To the editor: Although it is becoming ever more apparent that Trump is unfit for the presidency, I have qualms about the prospect of his possible departure. If the erratic behavior and ignorance of this administration give way to a smoother operation, will the public relapse into docile acquiescence?

The Republican Party and Trump want to pursue the same policies. Presumably the GOP would have smoother sailing without Trump in enacting tax cuts primarily for the rich; fewer safeguards for workers, consumers and minorities; regulations that would speed up climate change and despoil the environment; and privatization of important government functions.

If Trump goes, will citizens continue to mobilize against these extraordinary assaults?

Grace Bertalot, Anaheim

..

To the editor: Max Boot is certainly correct about one thing: If Trump does resign, it will be because his fellow Republicans force him to. He will not resign because of anything House Minority Leader Nancy Pelosi (D-San Francisco), Senate Minority Leader Chuck Schumer (D-N.Y.) or any other Democrat says about him.

I expect Trump to weather the storm and fight back with everything he has.

As for the good of the country, both the Republicans and Democrats have proved they are far more interested in their own political parties. If and when Republican legislators feel that not removing Trump from office will hurt their own chances of reelection, only then will they finally act.

Charles Reilly, Manhattan Beach

..

To the editor: Republicans should definitely tell Trump it is time to go, but theyd be preaching to the choir. Trump has recently lamented that he misses his old life and shown contempt for the job by golfing more weekends than actually governing.

Perhaps all these admissions and Russian photos and leaks are from him. He is, after all, the master manipulator.

We can only hope that Trumps selfishness will motivate him to resign and return to the life he misses so much so we can return to the life that Americans miss so much.

Rosemary Chiaverini, Sherman Oaks

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To the editor: Renfield picking imaginary flies out of the air in Dracula is no match for Trumps unhinged presidency.

A witch hunt? I think not. At no point does Trump take responsibility or offer contrition for his countless irrational missteps and lies.

Drowning in his own delusional desperation, might he just fire himself and ride out in a blaze of victimized glory? Dont be surprised.

Laurie Levin, Pacific Palisades

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How many Republicans might have been corrupted by President Trump? - Los Angeles Times

Speaker Paul Ryan (R-Wis.) spoke positively about the Justice Department's special counsel appointment on May 18, and confirmed that the bipartisan congressional investigations will continue. (Reuters)

Back in December 2015, the U.S. presidential election was just heating up and a bearded Rep. Paul D. Ryan (R-Wis.) was laying out his vision as thenew speaker of the House. There were a lot of things on Ryan's wish list, but by far the thing he wanted most was a Republican president.

We are not going to solve all the countrys problems next year, Ryan said. We need a new president. Its just that simple.

It's since proved to be anything but simple.

The Washington Post reported Friday that the FBI's investigation into possible coordination between President Trump and Russia has found its way into the White House. A senior White House adviser close to the president is under scrutinyby the FBI.

Oh, the irony for Ryan.

After a whole lot of heartache that was the 2016 campaign, Ryan got his wish: The electoral college handed a wintoa Republican president who was behind in the polls, and voters let Republicans keep their majorities in Congress.

Trump maybe wasn't Ryan's dream partner, but at least he checked two of Ryan's most important boxes: He was president, and he was a Republican.

Since then, things haven't been smooth. Well, yeah, it's always nice to have less drama, Ryantold reporters Thursday. But the benefits of having a Republican who will sign into law a rollback of Obamacare and tax-reform legislation Ryan's been dreaming of since he was in college far outweigh the headaches of a president stumbling and tweeting into near-daily controversies.

Now, the situation has drastically changed. And so could Ryan and every other Republican's calculations about whether standing by the Republican president they so badly wanted is worth it.

After a week of stunning news about Trump's behavior with Russian diplomats and his own FBI director, this is perhaps the most stunning.

The Post's Devlin Barrett and Matt Zapotosky reportthat the FBI's focus on a senior Trump adviser is the result of months of secret investigations that will soon become more public, with a grand jury and subpoenas. The FBI is investigating whether and to what extent Trump associates worked with Russia to hack into Democrats' emails during the presidential election. And investigatorsclearly feel they have a strong enough case to devote some of their resourcesto looking into the highest ranks of the White House. That's a big deal.

The law enforcement investigation into possible coordination between Russia and the Trump campaign has identified a current White House official as a significant person of interest. (The Washington Post)

And it meansfor the second day this week, the Trump administration has completely undermined everything Republicans havebeen saying to date about this Russia investigation.

Yes, both Congress and the FBI are looking into whether Trump associates helped Russia help Trump win the election. Yes, it was always a possibility this could go to the top. I think Putin pays... Trump, House Majority Leader Kevin McCarthy (R-Calif.) said to Ryan and other GOP colleagues last year, a month before Republicans officially nominated Trump. (McCarthy says that was a joke, and no investigation has concluded whether or if Trump's campaign worked with Russia.)

But throughout this whole ordeal, Republican leaders in Congress have brushed aside calls for a more independent investigation. Implicit in their messaging: It's not that serious.

Now, things are looking serious. We have a special counsel, former FBI director Robert S. Mueller III, with wide latitude to investigate whatever he wants under the umbrella of Trump associates and Russia. And the FBI's probe, which is climbing higher and higher in the Trump administration, could break out in the open.

For Republicans in Congress, this is all terrible news. Every escalation into Trump-Russia investigationsmakes it that much more difficult for them to a)keep their credibility intact for insisting none of this was necessary and b) stand by the president they so badly wanted.

When Republicans' new House speaker wished on that December day for aRepublican president, it's fair to say this is notwhat he was wishing for.

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Republicans' nightmare is starting to come true - Washington Post

The unpredictable investigation into Russian meddling in last year's presidential election, now reportedly reaching into President Trump's White House, could land like a political nuclear bomb on the Republican Party in 2018.

That's what worries Republicans in Congress now. They had initially expressed relief about the Justice Department's appointment of former FBI Director Robert Mueller as special counsel to lead the inquiry, believing that it might free them, and voters, to focus on their ambitious legislative agenda.

"There are all kinds of unintended consequences that could occur here, some of them of which are related to timing, some of them of which are related to serendipity," Rep. Trent Franks, R-Ariz., said. "There is always a danger that it will go off the rails."

Mueller's appointment was widely praised by Democrats and Republicans.

But both sides of the aisle remember how past investigations led by special counsels ended up implicating individuals not assumed to be targets, or uncovering wrongdoing not assumed to be the in the scope of the probe when it first began.

President Bill Clinton's affair with Monica Lewinsky was discovered as part of an investigation into his and wife Hillary Clinton's finances. Scooter Libby, aide to Vice President Dick Cheney, was the only official prosecuted in the investigation into who uncovered the identity of covert CIA agent Valerie Plame, even though State Department official Richard Armitage was the leaker.

The Whitewater probe lasted four years; the Plame inquiry took two. That's why Republicans also fret about timing. The Russia investigation could finish just before the midterm elections, or in the run up to 2020, a major problem for the GOP if it doesn't fully exonerate Trump and his associates.

"The concern of people like us, is that this investigation will drag on and pop on us in October of 2018, and totally screw us," said a Republican strategist, who requested anonymity in order to speak candidly.

"I just don't like the idea that this could be strung out, strung out, strung out, strung out. I think it becomes a really big distraction," added Rep. Mike Kelly, R-Pa., a key Trump ally on Capitol Hill.

Republicans have been at the mercy of a chaotic, undisciplined White House for the past two weeks.

First, Trump's abrupt firing of James Comey and suggestions that he dismissed the FBI director because he was unhappy with the bureau's ongoing investigation into Russian meddling in the 2016 contest and potential collusion by the Trump campaign.

Then, came revelations that the president might have previously pressured Comey to drop the investigation into Michael Flynn, his former national security adviser. Later there was news that Trump shared classified intelligence with Russian officials during an Oval Office meeting.

Finally, there was a report that Trump told the Russians during that same meeting that firing Comey relieved the pressure he was facing on the Russia probe.

It's all House and Senate Republicans have been asked about, not to mention questions related to what they intend to do about it. That's why, once Deputy Attorney General Rod Rosenstein appointed Mueller, so many of them were legitimately enthusiastic.

To a degree, they still are. Now, Republicans hope, they can get attention for work they're doing to address voters' priorities like job creation, as opposed to every fresh Trump Twitter post.

"I'm focused more on working on the bread and butter issues," said Rep. Barbara Comstock of Virginia, a top Democratic target in 2018. "This will enable us to go back to our work."

Trump has adamantly denied doing anything improper or illegal, complaining that he's the victim of a political witch-hunt. The Mueller-investigation might determine as much.

Yet the issue has taken a political toll, especially Trump's habit of calling attention to it through provocative counterattacks.

The president's job approval numbers have been driven even lower, and now sit below 40 percent in the Real Clear Politics average. Even Rasmussen, which usually shows much higher ratings for Trump, showed him at 44 percent.

If the atmosphere doesn't change, congressional Republicans could have a real reason to worry about 2018. The first test of that is coming up in competitive special House elections in Montana (on Thursday) and Georgia (on June 20.)

As of Friday, the Democrats led the average of polls testing the generic congressional ballot by 7 percentage points.

Republicans remain skeptical that the appointment of a special counsel will sufficiently push the matter of Trump and Russia aside to insulate them from political fallout. That's partly because probes in House and Senate committees are continuing.

"We've got multiple committees and subcommittees trying to get a piece of this investigation," Senate Majority Whip John Cornyn of Texas said. "I'm sure there are going to be a lot of people wanting to talk about what the president just said, or some rabbit trail, but we've got to stay focused."

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Republicans worry Mueller investigation could upend midterm elections - Washington Examiner

On Friday, there was a feeling of dj vu around the Minnesota Capitol.

After repeated delays in negotiations, the GOP leaders of the state Legislature decided to move ahead with a two-year, $46 billion state budget plan without final sign-off from DFL Gov. Mark Dayton. The Republicans said it was necessary in order to move the budget bills through the cumbersome legislative process before a constitutional deadline to adjourn session at midnight on Monday.

Its the second batch of budget bills Republicans have sent to Dayton this month without an agreement; the first round saw all the budget bills vetoed by the governor. Its also a repeat of 2015, when legislative leaders sent the governor budget bills without a final agreement. Its exactly where we were two years ago, Republican House Speaker Kurt Daudt said. We have decided to set joint budget targets that we think represent real compromise with the governor. We have moved our positions pretty significantly.

The move assures a messy finish to the 2017 legislative session, with a hurried weekend of budget work ahead and potential vetoes forthcoming from the governor. During an appearance on Twin Cities PBS Almanac show on Friday night, Dayton did not promise to veto all of the budget bills sent his way, but he said he was disappointed Republicans went ahead without him on the budget after he left meetings this afternoon to attend a funeral.

This is divided government, and they are already saying, We are going to have the budget the way we want it, Dayton said.

GOP leaders have released new budget targets that include a $660 million tax cut proposal, which is lower than the more than $1 billion tax cut they originally wanted but more than what Dayton had proposed. They also want to spend about $467 million more on education over the next two years; $200 million on higher education; and $164 million for courts and public safety. The targets also include more than $250 million in reductions to health and human services spending.

Progress was slow on a budget deal between the two sides all week. On Wednesday, Dayton offered a halfway proposal to split the surplus. But the two sides disagreed about what actually constituted the halfway point of the surplus, throwing a wrench into the negotiations. Even after a secret meeting at the governors residence Thursday evening and hushed meetings throughout the day Friday, Republican leaders and the governor still werent able to reach a global agreement.

So Republicans decided to move forward without Dayton. The Legislature has a job to do and it takes a few days, Daudt said. Weve reached that point where we have to start that process.

In 2015, the last time legislators sent Dayton a plan without his sign-off, the governor ultimately vetoed three of the budget bills, leading to a one-day special session that was nearly derailed over disagreements about spending on the environment. Republicans said they dont want that to happen this year, and plan to meet with Dayton over the weekend with the goal of drafting agreements he can sign. They have left $86 million unspent in their targets to accommodate ongoing negotiations.

This does not mean we are walking away from the table with the governor, Daudt said. In fact, its the opposite. We hope to engage with the governor over the course of the next three days and get agreement on all of these bills.

But Dayton was still concerned, not just about the numbers but about hundreds of policy measures that were tucked into the last round of budget bills Republicans sent him.

I'm not going to swallow it, Dayton said of those proposals, which include measures to block local governments from setting their own wage and labor laws; a delay on implementing waterway-buffer rules, one of Daytons signature initiatives; and changes to the makeup of the Metropolitan Council, the metro-area regional planning agency.

The way we resolved the shutdown in 2011: we took all of the policy out of the budget bills, Dayton said Friday.

Republicans said they will reduce the number of policy measures in the bill, but added that there is always some policy in budget bills. Every bill always has policy, said Senate Majority Leader Paul Gazelka. As far as the ones that are more volatile we will communicate with him.

If legislators dont finish their work by midnight on Monday, Dayton can immediately call them back to a special session, or they can negotiate terms over the following days and weeks. But an agreement must be struck by June 30, the final day of the fiscal year, or state government heads into automatic shutdown.

Dayton has said an important part of his legacy is in adopting a fiscally responsible two-year budget, one that doesnt leave ballooning expenses in future budgeting years. During his first session in office, in 2011, lawmakers faced a $6 billion budget deficit.

If we have any kind of economic downturn we are right in the same boat, he said, and avoiding a similar situation is a very important part of what I want to leave for my successor.

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With no deal in sight, legislative Republicans decide to move budget bills without Dayton's sign-off - MinnPost