TLDR
- U.S. court dismissed Coinbase user’s IRS challenge over procedural failure.
- User failed to notify U.S. Attorney General within 90-day requirement.
- IRS can compel crypto exchanges to share user data during audits.
- New Form 1099-DA will require crypto brokers to report transactions.
- Case dismissed without prejudice, allowing refiling if rules are met.
A U.S. federal court in California has dismissed a petition from a Coinbase user seeking to block the Internal Revenue Service (IRS) from accessing his financial records. The ruling adds to a growing number of cases where attempts to challenge IRS summonses tied to cryptocurrency activity have not advanced to trial.
Roger Metz filed the petition in May 2025 in the Northern District of California, aiming to quash an IRS summons issued in connection with an audit of his 2022 tax return. The summons required Coinbase to provide records related to his account activity. Metz argued that the request violated his privacy rights, was overly broad, and did not meet administrative standards.
He also stated that he had already identified the reporting issue, filed an amended return, and paid the additional taxes owed before the IRS issued the summons. Despite these arguments, the court did not rule on the merits of the claims.
Court Dismisses Case on Procedural Grounds
U.S. District Judge Araceli Martínez-Olguín dismissed the case based on procedural deficiencies. The court found that Metz failed to properly notify all required government entities within the mandated 90-day timeframe.
Under federal rules, individuals filing lawsuits against the government must serve notice to three parties: the local U.S. Attorney’s Office, the U.S. Attorney General in Washington, D.C., and the agency involved in the dispute. Metz acknowledged that he served the local office and the IRS but did not notify the Attorney General within the required period.
美国加州北区联邦法院于周三驳回 Coinbase 用户 Roger Metz 试图撤销国税局 IRS 传票的申请。Metz 于 2025 年 5 月提起诉讼，要求阻止 IRS 在审计其 2022 年报税表时，通过传票向 Coinbase…
— 吴说区块链 (@wublockchain12) March 19, 2026
The court stated that Metz did not provide a valid explanation for the omission. Judge Martínez-Olguín wrote that dismissal is appropriate when there is insufficient service of process, noting that the procedural requirement was not met.
The case was dismissed without prejudice, which allows Metz to refile the petition if procedural requirements are satisfied. The decision marks another instance where challenges to IRS summonses involving cryptocurrency exchanges have been resolved on procedural rather than substantive grounds.
IRS Authority and Crypto Exchange Reporting Requirements
Cryptocurrency exchanges operating in the United States are required to collect user data and provide information to tax authorities. The IRS has authority to issue summonses to obtain records during audits or investigations. In some cases, the agency uses “John Doe” summonses to request data on groups of users who meet specific transaction thresholds.
These measures are part of broader efforts to enforce tax compliance in the digital asset sector. Previous legal challenges have also faced setbacks. In a separate case, the U.S. Supreme Court declined to hear a petition from a crypto user who argued that such data collection violated constitutional protections.
At the same time, new reporting requirements are being introduced to standardize how crypto transactions are documented. The IRS is rolling out Form 1099-DA, which will require custodial crypto brokers to report certain user transactions beginning with the 2025 tax year.
Millions of users are expected to receive the form as regulators expand reporting frameworks. The rules are designed to align digital asset reporting with existing standards used in traditional financial markets.
Industry Response to New Tax Reporting Rules
Coinbase and other industry participants have raised concerns about the complexity of the new reporting requirements. Company representatives have stated that the framework may create additional administrative work for users, particularly for small transactions.
One issue involves stablecoins such as USDC. Although these assets are designed to maintain a stable value, they are still treated as property under current tax rules. This classification can require reporting even when transactions do not result in gains or losses.
Transaction fees, often referred to as gas fees, also present challenges. These fees can be minimal in value but may still need to be reported under existing guidelines. Industry representatives have questioned whether reporting very small amounts provides measurable benefit relative to the effort required.
Another area of complexity is cost basis calculation. For the 2025 tax year, some platforms will report gross proceeds from crypto sales without including cost basis data. Users may need to calculate this information independently, especially when assets are transferred across multiple wallets or exchanges.
Coinbase has called for adjustments to the reporting framework, including the introduction of minimum thresholds to reduce requirements tied to small transactions. The company has stated that clearer guidance could improve compliance while reducing administrative burdens for users.
