California judge dismisses Coinbase user’s attempt to quash IRS tax summons

A Coinbase user’s attempt to block an IRS summons for his financial records was blocked by a California court.

Summary

• A California court dismissed a Coinbase user’s attempt to block an IRS summons, citing failure to meet required notification rules within the 90 day deadline.
• The petition challenged the summons on privacy and scope grounds, even though the user had already amended his tax return and paid additional dues.

According to information from PACER, Roger Metz filed a petition in the Northern District of California in May last year to quash an IRS summons that sought his financial records in connection with an audit of his 2022 tax return.

Metz’s case was based on the argument that the summons violated his privacy rights and was overbroad. Metz’s lawyers had also argued that he had identified the error himself and had filed an amended return and paid the additional tax, but that did not prevent the IRS action.

However, US District Judge Araceli Martínez-Olguín ruled against the petitioner on Wednesday after finding that he failed to notify all required government parties within the 90-day window. The judge has dismissed the case on procedural grounds.

The ruling is based on federal civil procedure rules, where defendants must be formally notified of lawsuits to ensure they receive notice and the opportunity to respond. Court documents suggest Metz had served the US Attorney’s Office for the Northern District of California and the IRS, but had failed to notify the US Attorney General in Washington. Government lawyers argued this was sufficient grounds for dismissal.

“In his opposition brief, Metz does not offer any explanation for his failure to serve the United States within 90 days after filing his petition, much less that he had good cause,” Judge Martínez-Olguín said in the ruling.

The case has been dismissed without prejudice, as such Metz has the option to file the petition again at a later date.

IRS secures second victory

As previously reported by crypto.news, last year, another Coinbase user, James Harper, accused the IRS of violating his Fourth Amendment rights following a John Doe Summons used to obtain his data from a crypto exchange. The court, however, sided with the IRS and declined to hear his case.

The outcome reinforces the IRS’s authority to obtain user financial records from centralized crypto exchanges.