Case 3:16-cv-06658-JSC Document 1 Filed 11/17/16 Page 1 of 3 1 CAROLINE D. CIRAOLO Principal Deputy Assistant Attorney General 2 JEREMY N. HENDON (ORBN 982490) 3 AMY MATCHISON (CABN 217022) 4 Trial Attorneys United States Department of Justice, Tax Division 5 P.O. Box 683, Ben Franklin Station Washington, D.C. 20044 6 Telephone: (202) 353-2466 (202) 307-6422 7 Fax: (202) 307-0054 8 E-mail: Jeremy.Hendon@usdoj.gov Amy.T.Matchison@usdoj.gov 9 Western.Taxcivil@usdoj.gov 10 BRIAN J. STRETCH (CABN 163973) 11 United States Attorney THOMAS MOORE (ALBN 4305-O78T) 12 Chief, Tax Division COLIN C. SAMPSON (CABN 249784) 13 Assistant United States Attorney 450 Golden Gate Avenue, 11th Floor 14 San Francisco, California 94102 15 Telephone: (415) 436-7020 Email: Colin.Sampson@usdoj.gov 16 Attorneys for United States of America 17 UNITED STATES DISTRICT COURT FOR THE 18 NORTHERN DISTRICT OF CALIFORNIA 19 IN THE MATTER OF THE TAX LIABILITIES OF: 20 JOHN DOES, United States persons who, 21 at any time during the period January 1, 2013, through December 31, 2015, conducted 22 transactions in a convertible virtual currency as defined in IRS Notice 2014-21. 23 24 25 ) ) Civil Number: ) ) ) UNITED STATES’ EX PARTE PETITION ) FOR LEAVETO SERVE “JOHN DOE” ) SUMMONS ) ) ) The United States of America, by and through undersigned counsel, hereby petitions this Court 26 ex parte pursuant to 26 U.S.C. § 7609(h)(2) for an order authorizing service of an Internal Revenue 27 United States’ Ex Parte Petition For Leave to Serve “John Doe” Summons 1 14630810.1 Case 3:16-cv-06658-JSC Document 1 Filed 11/17/16 Page 2 of 3 1 Service “John Doe” summons to Coinbase, Inc., for information related to transactions in convertible 2 virtual currency as defined in IRS Notice 2014-21. In support, the United States avers as follows: 3 1. This ex parte proceeding is commenced pursuant to §§ 7402(a), 7609(f), and 7609(h) of 4 the Internal Revenue Code (26 U.S.C.), for leave to serve an Internal Revenue Service “John Doe” 5 summons on Coinbase, Inc., (“Coinbase”). 6 2. The Court has jurisdiction over this proceeding pursuant to §§ 7402(b) and 7609(h)(1) of 7 the Internal Revenue Code and 28 U.S.C. §§ 1340 and 1345. Venue properly lies within this district. 8 3. This proceeding is appropriate for assignment to the San Francisco or Oakland Divisions 9 since Coinbase is headquartered in San Francisco. 10 3. The IRS has launched an investigation to determine the correct federal income tax 11 liabilities for taxable years 2013-2015 of United States taxpayers who have conducted transactions in a 12 “convertible virtual currency” as that term is defined in IRS Notice 2014-21. The taxpayers being 13 investigated have not been or may not be complying with U.S. internal revenue laws requiring the 14 reporting of taxable income from virtual-currency transactions. 15 4. In furtherance of this investigation, the IRS seeks permission to serve, under the authority 16 of § 7602 of the Internal Revenue Code, an administrative “John Doe” summons to Coinbase. A copy 17 of the proposed summons is attached as Exhibit B to the Declaration of David Utzke, Senior Revenue 18 Agent, with the Internal Revenue Service. 19 5. The “John Doe” summons relates to the investigation of an ascertainable group or class 20 of persons, that is, United States taxpayers who, at any time during the years ended December 31, 2013, 21 through December 31, 2015, conducted transactions in a convertible virtual currency as defined in IRS 22 Notice 2014-21. 23 6. There is a reasonable basis for believing that such group or class of persons may fail, or 24 may have failed, to comply with one or more provisions of the internal revenue laws. 25 7. The information sought to be obtained from the examination of the records (and the 26 identity of the persons with respect to whose tax liabilities the summons will issue) is not readily 27 available from other sources. United States’ Ex Parte Petition For Leave to Serve “John Doe” Summons 2 14630810.1 Case 3:16-cv-06658-JSC Document 1 Filed 11/17/16 Page 3 of 3 1 8. In support of this Petition, the United States submits the Declaration of Senior Revenue 2 Agent David Utzke, the exhibits attached thereto, and a supporting memorandum. 3 Dated this 17th day of November, 2016. 4 CAROLINE D. CIRAOLO Principal Deputy Assistant Attorney General 5 /s/ Jeremy N. Hendon /s/ Amy Matchison JEREMY N. HENDON AMY MATCHISON Trial Attorneys, Tax Division U.S. Department of Justice 6 7 8 9 BRIAN J. STRETCH United States Attorney Northern District of California 10 11 12 /s/ Colin C. Sampson COLIN C. SAMPSON Assistant United States Attorney, Tax Division 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 United States’ Ex Parte Petition For Leave to Serve “John Doe” Summons 3 14630810.1 Case 3:16-cv-06658-JSC Document 1-1 Filed 11/17/16 Page 1 of 2 JS-CAND 44 (Rev. 07/16) CIVIL COVER SHEET The JS-CAND 44 civil cover sheet and the information contained herein neither replace nor supplement the filing and service of pleadings or other papers as required by law, except as provided by local rules of court. This form, approved in its original form by the Judicial Conference of the United States in September 1974, is required for the Clerk of Court to initiate the civil docket sheet. (SEE INSTRUCTIONS ON NEXT PAGE OF THIS FORM.) I. (a) PLAINTIFFS DEFENDANTS United States of America (b) County of Residence of First Listed Plaintiff County of Residence of First Listed Defendant (EXCEPT IN U.S. PLAINTIFF CASES) (IN U.S. PLAINTIFF CASES ONLY) IN LAND CONDEMNATION CASES, USE THE LOCATION OF THE TRACT OF LAND INVOLVED. Attorneys (If Known) NOTE: (c) Attorneys (Firm Name, Address, and Telephone Number) Jeremy Hendon and Amy Matchison Department of Justice - Tax Division P.O. Box 683, Washington DC 20044 II. BASIS OF JURISDICTION (Place an “X” in One Box Only) 1 2 U.S. Government Plaintiff 3 Federal Question (U.S. Government Not a Party) U.S. Government Defendant 4 Diversity (Indicate Citizenship of Parties in Item III) IV. NATURE OF SUIT CONTRACT (For Diversity Cases Only) PTF (Place an “X” in One Box Only) TORTS 110 Insurance 120 Marine 130 Miller Act 140 Negotiable Instrument 150 Recovery of Overpayment Of Veteran’s Benefits 151 Medicare Act 152 Recovery of Defaulted Student Loans (Excludes Veterans) 153 Recovery of Overpayment of Veteran’s Benefits 160 Stockholders’ Suits 190 Other Contract 195 Contract Product Liability 196 Franchise REAL PROPERTY 210 Land Condemnation 220 Foreclosure 230 Rent Lease & Ejectment 240 Torts to Land 245 Tort Product Liability 290 All Other Real Property 2 Removed from State Court 3 Remanded from Appellate Court and One Box for Defendant) PTF DEF DEF Citizen of This State 1 1 Incorporated or Principal Place of Business In This State 4 4 Citizen of Another State 2 2 Incorporated and Principal Place of Business In Another State 5 5 Citizen or Subject of a Foreign Country 3 3 Foreign Nation 6 6 FORFEITURE/PENALTY PERSONAL INJURY PERSONAL INJURY 310 Airplane 365 Personal Injury – 315 Airplane Product Product Liability Liability 367 Health Care/ 320 Assault, Libel & Pharmaceutical Slander Personal Injury 330 Federal Employers’ Product Liability Liability 368 Asbestos Personal 340 Marine Injury Product 345 Marine Product Liability Liability PERSONAL PROPERTY 350 Motor Vehicle 370 Other Fraud 355 Motor Vehicle 371 Truth in Lending Product Liability 380 Other Personal Property Damage 360 Other Personal Injury 385 Property Damage 362 Personal Injury Product Liability Medical Malpractice CIVIL RIGHTS PRISONER PETITIONS Habeas Corpus: 440 Other Civil Rights 441 Voting 463 Alien Detainee 442 Employment 510 Motions to Vacate Sentence 443 Housing/ Accommodations 530 General 535 Death Penalty 445 Amer. w/Disabilities– Employment Other: 540 Mandamus & Other 446 Amer. w/Disabilities– Other 550 Civil Rights 448 Education 555 Prison Condition 560 Civil Detainee– Conditions of Confinement V. ORIGIN (Place an “X” in One Box Only) 1 Original Proceeding III. CITIZENSHIP OF PRINCIPAL PARTIES (Place an “X” in One Box for Plaintiff BANKRUPTCY 625 Drug Related Seizure of Property 21 USC § 881 690 Other 422 Appeal 28 USC § 158 423 Withdrawal 28 USC § 157 PROPERTY RIGHTS 820 Copyrights 830 Patent 840 Trademark LABOR 710 Fair Labor Standards Act 720 Labor/Management Relations 740 Railway Labor Act 751 Family and Medical Leave Act 790 Other Labor Litigation 791 Employee Retirement Income Security Act SOCIAL SECURITY 861 HIA (1395ff) 862 Black Lung (923) 863 DIWC/DIWW (405(g)) 864 SSID Title XVI 865 RSI (405(g)) FEDERAL TAX SUITS 870 Taxes (U.S. Plaintiff or Defendant) 871 IRS–Third Party 26 USC § 7609 IMMIGRATION 462 Naturalization Application 465 Other Immigration Actions 4 Reinstated or Reopened 5 Transferred from Another District (specify) 6 Multidistrict Litigation–Transfer OTHER STATUTES 375 False Claims Act 376 Qui Tam (31 USC § 3729(a)) 400 State Reapportionment 410 Antitrust 430 Banks and Banking 450 Commerce 460 Deportation 470 Racketeer Influenced and Corrupt Organizations 480 Consumer Credit 490 Cable/Sat TV 850 Securities/Commodities/ Exchange 890 Other Statutory Actions 891 Agricultural Acts 893 Environmental Matters 895 Freedom of Information Act 896 Arbitration 899 Administrative Procedure Act/Review or Appeal of Agency Decision 950 Constitutionality of State Statutes 8 Multidistrict Litigation–Direct File Cite the U.S. Civil Statute under which you are filing (Do not cite jurisdictional statutes unless diversity): VI. CAUSE OF ACTION 26 U.S.C. Section 7609 Brief description of cause: Ex Parte Petition for Leave to Serve John Doe Summons DEMAND $ 0.00 VII. REQUESTED IN CHECK IF THIS IS A CLASS ACTION UNDER RULE 23, Fed. R. Civ. P. COMPLAINT: VIII. RELATED CASE(S), IF ANY (See instructions): JUDGE IX. DIVISIONAL ASSIGNMENT (Civil Local Rule 3-2) (Place an “X” in One Box Only) SAN FRANCISCO/OAKLAND DATE: 11/16/2016 CHECK YES only if demanded in complaint: JURY DEMAND: Yes No DOCKET NUMBER SAN JOSE EUREKA-MCKINLEYVILLE SIGNATURE OF ATTORNEY OF RECORD: /s/ Amy Matchison JS-CAND 44 (rev. 07/16) Case 3:16-cv-06658-JSC Document 1-1 Filed 11/17/16 Page 2 of 2 INSTRUCTIONS FOR ATTORNEYS COMPLETING CIVIL COVER SHEET FORM JS-CAND 44 Authority For Civil Cover Sheet. The JS-CAND 44 civil cover sheet and the information contained herein neither replaces nor supplements the filings and service of pleading or other papers as required by law, except as provided by local rules of court. This form, approved in its original form by the Judicial Conference of the United States in September 1974, is required for the Clerk of Court to initiate the civil docket sheet. Consequently, a civil cover sheet is submitted to the Clerk of Court for each civil complaint filed. The attorney filing a case should complete the form as follows: I. a) Plaintiffs-Defendants. Enter names (last, first, middle initial) of plaintiff and defendant. If the plaintiff or defendant is a government agency, use only the full name or standard abbreviations. If the plaintiff or defendant is an official within a government agency, identify first the agency and then the official, giving both name and title. b) County of Residence. For each civil case filed, except U.S. plaintiff cases, enter the name of the county where the first listed plaintiff resides at the time of filing. In U.S. plaintiff cases, enter the name of the county in which the first listed defendant resides at the time of filing. (NOTE: In land condemnation cases, the county of residence of the “defendant” is the location of the tract of land involved.) c) Attorneys. Enter the firm name, address, telephone number, and attorney of record. If there are several attorneys, list them on an attachment, noting in this section “(see attachment).” II. Jurisdiction. The basis of jurisdiction is set forth under Federal Rule of Civil Procedure 8(a), which requires that jurisdictions be shown in pleadings. Place an “X” in one of the boxes. If there is more than one basis of jurisdiction, precedence is given in the order shown below. (1) United States plaintiff. Jurisdiction based on 28 USC §§ 1345 and 1348. Suits by agencies and officers of the United States are included here. (2) United States defendant. When the plaintiff is suing the United States, its officers or agencies, place an “X” in this box. (3) Federal question. This refers to suits under 28 USC § 1331, where jurisdiction arises under the Constitution of the United States, an amendment to the Constitution, an act of Congress or a treaty of the United States. In cases where the U.S. is a party, the U.S. plaintiff or defendant code takes precedence, and box 1 or 2 should be marked. (4) Diversity of citizenship. This refers to suits under 28 USC § 1332, where parties are citizens of different states. When Box 4 is checked, the citizenship of the different parties must be checked. (See Section III below; NOTE: federal question actions take precedence over diversity cases.) III. Residence (citizenship) of Principal Parties. This section of the JS-CAND 44 is to be completed if diversity of citizenship was indicated above. Mark this section for each principal party. IV. Nature of Suit. Place an “X” in the appropriate box. If the nature of suit cannot be determined, be sure the cause of action, in Section VI below, is sufficient to enable the deputy clerk or the statistical clerk(s) in the Administrative Office to determine the nature of suit. If the cause fits more than one nature of suit, select the most definitive. V. Origin. Place an “X” in one of the six boxes. (1) Original Proceedings. Cases originating in the United States district courts. (2) Removed from State Court. Proceedings initiated in state courts may be removed to the district courts under Title 28 USC § 1441. When the petition for removal is granted, check this box. (3) Remanded from Appellate Court. Check this box for cases remanded to the district court for further action. Use the date of remand as the filing date. (4) Reinstated or Reopened. Check this box for cases reinstated or reopened in the district court. Use the reopening date as the filing date. (5) Transferred from Another District. For cases transferred under Title 28 USC § 1404(a). Do not use this for within district transfers or multidistrict litigation transfers. (6) Multidistrict Litigation Transfer. Check this box when a multidistrict case is transferred into the district under authority of Title 28 USC § 1407. When this box is checked, do not check (5) above. (8) Multidistrict Litigation Direct File. Check this box when a multidistrict litigation case is filed in the same district as the Master MDL docket. Please note that there is no Origin Code 7. Origin Code 7 was used for historical records and is no longer relevant due to changes in statute. VI. Cause of Action. Report the civil statute directly related to the cause of action and give a brief description of the cause. Do not cite jurisdictional statutes unless diversity. Example: U.S. Civil Statute: 47 USC § 553. Brief Description: Unauthorized reception of cable service. VII. Requested in Complaint. Class Action. Place an “X” in this box if you are filing a class action under Federal Rule of Civil Procedure 23. Demand. In this space enter the actual dollar amount being demanded or indicate other demand, such as a preliminary injunction. Jury Demand. Check the appropriate box to indicate whether or not a jury is being demanded. VIII. Related Cases. This section of the JS-CAND 44 is used to identify related pending cases, if any. If there are related pending cases, insert the docket numbers and the corresponding judge names for such cases. IX. Divisional Assignment. If the Nature of Suit is under Property Rights or Prisoner Petitions or the matter is a Securities Class Action, leave this section blank. For all other cases, identify the divisional venue according to Civil Local Rule 3-2: “the county in which a substantial part of the events or omissions which give rise to the claim occurred or in which a substantial part of the property that is the subject of the action is situated.” Date and Attorney Signature. Date and sign the civil cover sheet. Case 3:16-cv-06658-JSC Document 1-2 Filed 11/17/16 Page 1 of 2 1 CAROLINE D. CIRAOLO Principal Deputy Assistant Attorney General 2 JEREMY N. HENDON (ORBN 982490) 3 AMY MATCHISON (CABN 217022) 4 Trial Attorneys United States Department of Justice, Tax Division 5 P.O. Box 683, Ben Franklin Station Washington, D.C. 20044 6 Telephone: (202) 353-2466 (202) 307-6422 7 Fax: (202) 307-0054 8 E-mail: Jeremy.Hendon@usdoj.gov Amy.T.Matchison@usdoj.gov 9 Western.Taxcivil@usdoj.gov 10 BRIAN J. STRETCH (CABN 163973) United States Attorney 11 THOMAS MOORE (ALBN 4305-O78T) 12 Chief, Tax Division COLIN C. SAMPSON (CABN 249784) 13 Assistant United States Attorney 450 Golden Gate Avenue, 11th Floor 14 San Francisco, California 94102 15 Telephone: (415) 436-7020 Email: Colin.Sampson@usdoj.gov 16 Attorneys for United States of America 17 UNITED STATES DISTRICT COURT FOR THE 18 NORTHERN DISTRICT OF CALIFORNIA 19 IN THE MATTER OF THE TAX LIABILITIES OF: 20 JOHN DOES, United States persons who, 21 at any time during the period January 1, 2013, through December 31, 2015, conducted 22 transactions in a convertible virtual currency as defined in IRS Notice 2014-21. 23 24 25 26 27 ) ) Civil Number: ) ) ) [PROPOSED] ORDER GRANTING ) EX PARTE PETITION FOR LEAVE TO ) SERVE “JOHN DOE” SUMMONS ) ) ) THIS MATTER is before the Court upon the United States of America’s “Ex Parte Petition for Leave to Serve “John Doe” Summons” (the “Petition”). Based upon a review of the Petition and supporting documents, the Court has determined that the “John Doe” summons to Coinbase, Inc. relates [Proposed] Order Granting Ex Parte Petition For Leave to Serve John Doe Summons 1 Case 3:16-cv-06658-JSC Document 1-2 Filed 11/17/16 Page 2 of 2 1 to the investigation of an ascertainable group or class of persons, that there is a reasonable basis for 2 believing that such group or class of persons has failed or may have failed to comply with any provision 3 of any internal revenue laws, and that the information sought to be obtained from the examination of the 4 records or testimony (and the identities of the persons with respect to whose liability the summons is 5 issued) are not readily available from other sources. It is therefore: 6 ORDERED AND ADJUDGED that the Internal Revenue Service, through Senior Revenue 7 Agent David Utzke or any other authorized officer or agent, may serve an Internal Revenue Service 8 John Doe summons upon Coinbase, Inc. in substantially the form as attached as Exhibit B to Declaration 9 of Senior Revenue Agent David Utzke. A copy of this Order shall be served together with the 10 summons. 11 IT IS SO ORDERED this day of , 2016. 12 13 14 United States District Judge 15 16 Presented by: 17 CAROLINE D. CIRAOLO Principal Deputy Assistant Attorney General 18 19 /s/ Jeremy N. Hendon /s/ Amy Matchison 20 JEREMY N. HENDON AMY MATCHISON 21 Trial Attorneys, Tax Division U.S. Department of Justice 22 23 BRIAN J. STRETCH United States Attorney 24 Northern District of California 25 /s/ Colin C. Sampson COLIN C. SAMPSON 26 Assistant United States Attorney, Tax Division 27 [Proposed] Order Granting Ex Parte Petition For Leave to Serve John Doe Summons 2