Mystery Coinbase Customer Steps up in Fight to Quash IRS Tax Hunt

Coinbase users aren't backing down from an effort to shoot down an IRS subpoena seeking customer names and transaction data for an investigation on their potential tax liabilities.

According to a new filing in the case, the U.S. Northern district court of California has granted a motion on behalf of a fourth anonymous Coinbase customer, identified as John Doe 4 in the documents, to challenge the IRS summon, first filed in November last year as reported previously.

Since then, there have been notable developments as it relates to the plaintiffs in the lawsuit.

After one customer Jeffrey Berns went public with his bid to challenge the tax hunt, for example, the IRS withdrew inquiries on him specifically as his identity was already revealed.

The counteraction led to several precedent anonymous users named John Doe 1, 2, 3, to continue the effort to scrap the case.

The filing shows the IRS subsequently narrowed down the criteria in its summon to disqualify John Doe 1, 2, 3 for filing motions to intervene, by focusing on users who had sent transactions totaling over $20,000.

The district court also detailed four factors in determining whether the right to intervene should be granted, and consequently decided that John Doe 4 met all factors.

As a result, John Doe 4 is now allowed to represent users in a motion to challenge the IRS petition, and do so anonymously.

Disclosure: CoinDesk is a subsidiary of Digital Currency Group, which has an ownership stake in Coinbase.