Case: Petition to Quash Summons Denied in Cryptocurrency Audit, Summons Overbroad (W.D. Wash.) (IRC §7602)

IRS ordered to amend third-party summons as some requests for information from cryptocurrency exchange considered overbroad and irrelevant in determining taxpayer’s tax liability, a district court held. Taxpayer filed his 2016 return disclosing capital gain from bitcoin transactions, but then consulted an accountant and filed an amended return taking back a large sum of the capital gain reported, yielding over $15,000 in a tax refund. The IRS began investigating Taxpayer and discovered that Taxpayer used a currency exchange that he never disclosed. The IRS issued a third-party summons to that exchange requesting any books, records, papers, and other data relating ...