California court tosses Coinbase user bid to block IRS summons

A federal court in California on Wednesday dismissed a Coinbase customer's petition to quash an Internal Revenue Service summons seeking account and transaction records tied to his exchange activity.

The case centered on the customer's effort to stop the IRS from obtaining information from Coinbase as part of a tax inquiry. The court found no basis to block the agency from pursuing the records through its administrative process.

The IRS requested the data to review digital-asset activity and check whether taxpayers reported gains and income from cryptocurrency transactions. Courts have upheld similar summonses when the IRS shows a legitimate investigative purpose and follows required procedures.

The ruling extends a series of decisions supporting the IRS's authority to seek records from crypto exchanges. It is at least the second time in the past year that a Coinbase user's challenge to such a summons has not advanced to trial.

We previously compared Coinbase with Gemini exchanges in our Gemini vs Coinbase Review 2026 – Fees, Assets, and Reliability, looking at trading fees, available assets, and other key factors that shape the user experience on both exchanges.

The IRS has increased scrutiny of digital-asset transactions in recent years, citing concerns over underreported gains and tax evasion. By obtaining records from exchanges, the agency compares reported income with actual trading to identify discrepancies.

Although blockchain transactions are pseudonymous, records linked to exchange accounts can be produced through lawful process, including administrative summonses.

Related: Germany moves to tighten crypto tax reporting under DAC8