IRS Seeks Dismissal Of Crypto Founder’s Appeal Over Summonses

According to Cointelegraph, the U.S. Internal Revenue Service (IRS) has requested an appeals court to dismiss a plea from a cryptocurrency founder seeking to quash summonses issued by the tax authority. The IRS and the Department of Justice (DOJ) submitted a legal brief to the Fifth Circuit appeals court on February 10, arguing that the court lacks jurisdiction as no legal proceeding exists in the case initially filed in a federal court against Rowland Marcus Andrade and his company, ABTC Corporation. The IRS initiated an investigation into ABTC Corporation to assess potential violations of financial reporting laws under the Bank Secrecy Act. The agency sought Andrade’s personal financial records, suspecting his involvement with ABTC. However, Andrade contended that he was not properly notified about the summonses. The investigation dates back to 2021, with the IRS issuing summonses to Bank of America and JPMorgan Chase in May 2023, seeking financial records related to Andrade and ABTC. Andrade claimed the IRS failed to notify him as required by the Right to Financial Privacy Act (RFPA). Court records indicate that Andrade’s attorney discovered the summonses and requested copies from the IRS. By September, the IRS had reissued the summonses with notifications sent to Andrade’s business address, which were returned as undeliverable in October. In February 2024, Andrade filed a lawsuit in Texas to quash the summonses, alleging that the IRS violated financial privacy laws. In May, the district court denied Andrade’s motion, ruling that the IRS complied with RFPA requirements and properly notified him with the second issuance of summonses. The court deemed the case moot as the banks had already complied with the summonses and provided the requested records. In August, Andrade appealed the ruling to the Fifth Circuit, seeking a stay to prevent the IRS from reviewing the bank records during the appeal process. The IRS and DOJ argued in their latest brief that Andrade is not entitled to damages or attorney fees, as these are contingent upon a statutory violation, which they claim did not occur. The case is currently pending in the Fifth Circuit, where the court will decide whether to accept Andrade’s appeal or uphold the district court’s ruling. In a related matter, the Securities and Exchange Commission (SEC) charged Andrade in 2020, when he was CEO of the NAC Foundation, with conducting an unregistered securities offering of AML Bitcoin, a token purported to be an enhanced version of Bitcoin (BTC).