A California court has dismissed a Coinbase user’s attempt to block an IRS summons for his financial records, marking another setback in the ongoing battle between cryptocurrency users and tax authorities.
In a ruling that highlights the importance of procedural compliance, US District Judge Araceli Martínez-Olguín dismissed Roger Metz’s petition on Wednesday, finding that he had failed to notify the required government officials within the 90-day window as mandated by the Federal Rules of Civil Procedure.
Metz’s Case and the Procedural Snag
Roger Metz filed a petition in the Northern District of California in May 2025, seeking to quash an IRS summons that ordered Coinbase to hand over his financial records. The summons was issued in connection with an audit of his 2022 federal tax return. Metz’s legal team argued that the summons violated his privacy rights, was overbroad, and failed to meet basic administrative requirements.
Moreover, Metz’s lawyers contended that by the time the IRS issued the summons in 2024, he had already identified an error, filed an amended return, and paid the additional tax owed. However, the court found that Metz had not served the US Attorney General in Washington, D.C., within the 90-day deadline, a critical procedural step that ultimately led to the dismissal of his case.
The Broader Context of IRS Crypto Audits
The dismissal of Metz’s case is part of a larger trend where the IRS is increasingly leveraging legal tools to gather information on cryptocurrency users. Major exchanges like Coinbase are legally required to share user data with tax agencies, and the IRS can issue “John Doe Summons” to identify large groups of unidentified taxpayers.
Miles Brooks, the director of tax strategy at CoinLedger, noted that the IRS’s use of these summons is a significant tool in its arsenal. “Crypto exchanges are legally obligated to report user information to the IRS, and the John Doe Summons allows the agency to target specific groups of users who may have underreported their taxable income,” Brooks explained.
Previous Challenges and Future Implications
In a related case last year, James Harper accused the IRS of violating his Fourth Amendment rights after the agency used a John Doe Summons to collect his data from a crypto exchange. The Supreme Court declined to hear his case, further solidifying the IRS’s authority in this domain.
The dismissal of Metz’s case, while a procedural matter, underscores the need for cryptocurrency users to be vigilant about their tax compliance and to ensure that they follow all legal procedures when challenging IRS actions. “This case serves as a reminder that the IRS is taking a proactive approach to crypto taxation, and users must be prepared to meet the regulatory requirements,” said Brooks.
Looking Forward
As the crypto industry continues to grow, the regulatory landscape is likely to become even more complex. Users and exchanges alike will need to stay informed about the latest legal developments and ensure they are in compliance with all relevant tax laws. The IRS is unlikely to ease up on its efforts to collect taxes on cryptocurrency transactions, making it crucial for users to keep detailed records and seek professional advice when necessary.
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