Today, Judge Jacqueline Scott Corley heard arguments on the motions to intervene filed by several Coinbase customers in the Government’s proceeding to enforce the IRS summons it previously served on Coinbase. Last November, the Court permitted the IRS to serve a summons on Coinbase seeking the identities of, and all records pertaining to, all of Coinbase’s U.S. customers. After Coinbase refused to comply with the summons, the Government filed a petition to enforce the summons in March 2017.
At today’s hearing, Judge Corley appeared puzzled as to why the Government would spend resources trying to prevent Coinbase’s customers from opposing enforcement. The Court pressed the Government’s attorney, Amy Matchison of the Department of Justice, as to why Coinbase customers did not have standing to intervene in the proceeding and whether there was any legal precedent supporting the Government’s position.
The Court seemed skeptical of the Government’s response that Congress had not provided the unnamed subjects of John Doe summons with any rights to intervene in enforcement proceedings. When queried about the same issue, Lee Weiss, counsel for Proposed Intervenors John Doe Nos. 1 and 2, Coinbase customers whose records are covered by the IRS summons, contended that the Proposed Intervenors would provide the Court with an important perspective in opposition to the enforcement petition and that there was no congressional bar to intervention.
Mr. Weiss further asserted that the Proposed Intervenors had already impacted the proceedings, as the Government indicated at the hearing that it is considering narrowing the scope of the summons.
In response to a request from Coinbase’s counsel, Steven Ellis, the Government agreed to advise Coinbase by July 6 as to whether it intends not to seek enforcement concerning certain categories of information sought by the summons.
Judge Corley took the motions under submission at the end of the hearing and is expected to rule shortly.
Jeffrey Berns is the Managing Partner of Berns Weiss LLP and is also CEO of Berns Inc, parent company to ETHNews.