The U.S. Internal Revenue Service (IRS) has urged a federal appeals court to dismiss a challenge from crypto founder Rowland Marcus Andrade, who is seeking to quash tax summonses issued against him.
Andrade claims the IRS failed to properly notify him before requesting his financial records.
In a February 10 legal brief to the Fifth Circuit Court of Appeals, the IRS and the Department of Justice (DOJ) argued that the court lacks jurisdiction over Andrade’s case, as there was no formal legal proceeding against him.
The dispute originates from an IRS investigation into Andrade’s firm, ABTC Corporation, for potential violations of financial reporting laws under the Bank Secrecy Act.
IRS Investigation and Andrade’s Challenge
The case dates back to 2021, when the IRS began investigating ABTC Corp. to determine whether Andrade was involved in financial misconduct.
In May 2023, the agency issued summonses to Bank of America and JPMorgan Chase, requesting financial records related to Andrade and ABTC.
Andrade later argued that the IRS violated the Right to Financial Privacy Act (RFPA) by failing to provide proper notification before seeking his records.
According to court filings, Andrade’s attorney discovered the summonses independently and requested copies from the IRS.
In September 2023, the agency reissued the summonses, this time sending notifications to Andrade’s business address. However, those notices were returned as undeliverable in October 2023.
In February 2024, Andrade filed a lawsuit in Texas seeking to invalidate the IRS summonses, claiming the agency had violated his financial privacy rights.
In May 2024, a district court ruled against Andrade, finding that the IRS had complied with RFPA requirements by issuing new summonses and notifications.
The court also noted that the case was moot since the banks had already complied with the IRS requests and turned over Andrade’s financial records.
Following the decision, Andrade appealed the ruling to the Fifth Circuit in August, requesting a stay to prevent the IRS from reviewing his bank records while the appeal is ongoing.
In its February 10 brief, the IRS and DOJ pushed back, arguing that the IRS had substantially complied with the RFPA, making Andrade ineligible for damages or attorney’s fees, which are only granted in cases of statutory violations.
The case remains pending in the Fifth Circuit, with the court expected to decide whether to hear Andrade’s appeal or uphold the district court ruling.
Andrade’s Legal History
This is not Andrade’s first legal battle. In 2020, the Securities and Exchange Commission (SEC) charged him, then CEO of the NAC Foundation, with conducting an unregistered securities offering for AML Bitcoin, a token marketed as an enhanced version of Bitcoin.
The SEC accused Andrade of misleading investors and violating securities laws.
Last year, the Blockchain Association, in collaboration with the Texas Blockchain Council, launched a lawsuit against the U.S. Internal Revenue Service (IRS) over its latest cryptocurrency regulations.
The legal challenge pushed back against the IRS’ new rules requiring brokers to report digital asset transactions, which are set to take effect in 2027.
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