The IRS has urged an appeals court to dismiss a crypto founder’s bid to overturn summonses, countering claims of improper notification.
When the US tax department called banks for cryptocurrency creator Rowland Marcus Andrade’s financial records, it said it was in compliance with financial privacy regulations.
The US Internal Revenue Service has asked an appeals court to reject a cryptocurrency founder’s request to overturn summonses the tax regulator issued against him, which he said were improperly notified.
The IRS and Department of Justice contended in a legal brief submitted to the Fifth Circuit appeals court on February 10 that the court lacked jurisdiction because the case, which they had initially filed in a federal court against cryptocurrency founder Rowland Marcus Andrade and his company, ABTC Corporation, was not yet pending.
According to the IRS, it looked into ABTC Corp. to see if there might have been any possible infractions of the Bank Secrecy Act’s financial reporting regulations. Andrade claimed he was never given adequate notice of the summonses. Still, the agency claimed it was looking for his personal financial information because it thought he was connected to ABTC.
The IRS started looking into Andrade in 2021 when the case began. The IRS summoned Bank of America and JPMorgan Chase in May 2023 to produce bank information about Andrade and ABTC. Andrade said the IRS did not inform him as required by the RFPA, the Right to Financial Privacy Act.
Court documents state that Andrade’s lawyer found the summonses and asked the IRS for copies. The Internal Revenue Service dispatched notifications to Andrade’s business address in September after sequestering its previous summonses, which were later returned as undeliverable in October.
Andrade sued to revoke the Texas summons in February 2024, alleging the IRS had broken financial privacy rules.
The district court rejected Andrade’s move to quash in May, concluding that the Internal Revenue Service had complied with RFPA regulations and had duly notified him of the second summons issuance. It contended that the lawsuit was moot because the banks had already cooperated with the summonses and provided the sought records.
Andrade challenged the decision to the Fifth Circuit in August, asking for a stay to stop the IRS from looking through the bank data while the matter is being appealed.
According to the Internal Revenue Service and DOJ’s most recent brief, “Andrade is not entitled to damages and attorneys fees, which are contingent upon a statutory violation, because the IRS substantially complied with the RFPA.”
The Fifth Circuit is considering whether to accept Andrade’s appeal or maintain the district court’s decision.
Andrade, the CEO of the NAC Foundation at the time, was charged by the SEC in 2020 with conducting an unregistered securities sale of AML Bitcoin, a token that the defendants asserted was an enhanced and new form of Bitcoin BTC$95,899.
