California court dismisses Coinbase user’s bid to quash IRS summons

California court tosses Coinbase user’s bid to block IRS

A federal judge in California dismissed a Coinbase customer’s petition to stop the IRS from getting his exchange records. The case fell on a missed service deadline, not on privacy merits.

Judge Araceli Martínez-Olguín ruled the filing defective after the petitioner, Roger Metz, failed to serve the U.S. Attorney General within 90 days, as required when suing the federal government. The order is recorded on the case docket here. The court emphasized the procedural issue, writing that “dismissal of a case is proper when there is insufficient service of process” according to the decision summary.

Metz filed in May 2025 to quash an IRS summons to Coinbase seeking records for his 2022 audit. He argued the summons was overbroad and unnecessary because he had already amended his 2022 return and paid additional tax before the IRS formally requested the data in 2024. The court did not reach these arguments due to the service defect source.

The ruling underscores how courts continue to back the government’s information-gathering via John Doe summonses and the longstanding third‑party doctrine, which limits privacy claims over records held by intermediaries. A similar privacy challenge by James Harper was also dismissed, with the Supreme Court declining review earlier this year source.

Key takeaways for investors:
- Centralized exchanges remain subject to IRS summonses, used since 2016 to obtain customer data from platforms including Coinbase, Kraken, and Circle source.
- Starting in 2026, new Form 1099‑DA broker reporting is set to send proceeds data directly to the IRS, reducing reliance on summonses source.
- Procedural missteps can end challenges before courts consider privacy claims, as seen in Metz’s case source.