IRS Seeks Dismissal of Crypto Executive's Appeal Against Bank Record Summons

The US Internal Revenue Service (IRS) has requested that an appeals court dismiss a crypto executive's appeal against bank record summonses, arguing that the court lacks jurisdiction. The case involves crypto founder Rowland Marcus Andrade and his firm, ABTC Corporation.

The IRS initiated an investigation into ABTC Corp in 2021 to determine potential violations of financial reporting laws under the Bank Secrecy Act. The agency sought Andrade's personal financial records, believing he was involved with ABTC. However, Andrade argued that he was not properly notified about the summonses.

In May 2023, the IRS issued summonses to Bank of America and JPMorgan Chase, 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).

Andrade's attorney discovered the summonses and requested copies from the IRS. By September, the IRS had sequestered its summonses and issued new ones with notifications mailed 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, claiming the IRS violated financial privacy laws. In May, the district court denied Andrade's motion to quash, ruling that the IRS followed RFPA requirements and properly notified him with the second summons issuance. The court argued that the case was moot since the banks had already complied with the summonses and turned over the requested records.

In August, Andrade appealed the ruling to the Fifth Circuit, requesting a stay to prevent the IRS from reviewing the bank records while the case is under appeal. However, the IRS and Department of Justice argued in their latest brief that Andrade is not entitled to damages and attorneys' fees, as the IRS substantially complied with the RFPA.

The case is currently pending in the Fifth Circuit, with the court deciding whether to accept Andrade's appeal or uphold the district court ruling.