Tax Controversy Corner - Meet John Doe Summonses
5 Pages Posted: 28 Jun 2017
Date Written: May 1, 2017
Abstract
"John Doe" summonses have been in the news again. On November 30, 2016, a federal district court authorized DOJ to serve a John Doe summons pursuant to Internal Revenue Code Sec. 7609(f) on Coinbase, a virtual currency exchanger on the grounds that convertible virtual currency, such as Bitcoin, is difficult to trace and there is a reasonable basis for believing that some virtual currency users have failed to comply with federal tax law. In light of the government's continued use of this powerful investigatory tool, this column discusses the John Doe summons: what it is, how the government gets authority for it, whether it can be challenged, and what practitioners need to consider when a client may be the target of a John Doe summons.
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