A normal IRS summons has your name on it. A John Doe summons does not. It goes to a third party, such as a crypto exchange, and asks for records about a group of customers the IRS cannot yet identify. The IRS uses the records to find out who the customers are, and then decides what to do about each of them.

The Supreme Court described the device in Tiffany Fine Arts, Inc. v. United States, 469 U.S. 310 (1985), as a summons issued “where the IRS does not know the identity of the taxpayer under investigation,” as the First Circuit later quoted it in Harper v. Werfel. The crypto version is the same tool aimed at a new kind of record keeper.

Here is how it works, step by step, and what it means for you if you were a customer.

The power underneath: IRC 7602

Every IRS summons starts with IRC 7602(a). For the purpose of ascertaining the correctness of any return, making a return where none has been made, determining any person’s tax liability, or collecting it, the IRS may examine any books, papers, records or other data “which may be relevant or material,” and may summon any person having possession of books of account relating to the taxpayer, or “any other person” the IRS deems proper, to produce records and give testimony.

That last phrase is broad on purpose. An exchange is a person holding records about its customers. Under 7602, the IRS can summon it.

When the IRS wants a court to enforce a summons, the standard comes from United States v. Powell, 379 U.S. 48 (1964). The government must show that the investigation has a legitimate purpose, that the inquiry may be relevant to that purpose, that the information is not already in the IRS’s possession, and that the required administrative steps were followed. The burden of showing an abuse of the court’s process is on the person resisting.

The extra hurdle: IRC 7609(f)

When the summons does not identify the taxpayer, Congress added a gate. Under IRC 7609(f), a John Doe summons “may be served only after a court proceeding” in which the IRS establishes three things:

  • The summons relates to the investigation of a particular person or an ascertainable group or class of persons.
  • There is a reasonable basis for believing that the person or group may fail or may have failed to comply with any provision of the internal revenue law.
  • The information sought, and the identity of the people involved, is not readily available from other sources.

Since 2019, the statute adds one more requirement. The IRS shall not issue the summons unless the information sought “is narrowly tailored to information that pertains to the failure (or potential failure)” of the group to comply with the tax provisions identified. That narrow-tailoring sentence became important in the crypto cases, as you will see in the Kraken summons fight.

The court step happens without you

IRC 7609(h)(2) says the determinations required under subsection (f) “shall be made ex parte and shall be made solely on the petition and supporting affidavits.” Ex parte means one side. The Justice Department files a petition, usually with a declaration from an IRS agent explaining the investigation, and a federal judge decides whether the statutory test is met.

No customer is in the courtroom, because no customer has been identified yet. That is the whole point.

Ex parte does not mean rubber stamp. In the Kraken matter, the magistrate judge issued an order to show cause on March 31, 2021, finding that the IRS had likely satisfied the first three elements but questioning whether categories like “complete user preferences” and “all correspondence” were narrowly tailored. The government had to justify its requests or narrow them.

No notice to the customers

For an ordinary third-party summons, IRC 7609(a) requires the IRS to give notice to the person whose records are sought, and IRC 7609(b) gives that person the right to petition to quash within 20 days. Those rights are how you would normally fight a summons to your bank.

John Doe summonses are carved out. IRC 7609(c)(3) says subsection (a) “shall not apply to any summons described in subsection (f).” No notice goes to the John Does, and the statutory right to quash belongs only to people entitled to notice. The exchange itself can resist enforcement, and in the Coinbase case it did. Individual customers mostly learn about it after the fact, from the news or from an IRS letter.

The clock on your tax year may stop

Here is a detail almost nobody mentions. IRC 7609(e)(2) says that if the summoned party’s response is not resolved, the statute of limitations under IRC 6501 for assessing tax against the people the summons concerns is suspended, starting six months after service of the summons and ending with final resolution of the response.

And IRC 7609(i)(4) requires the summoned party, in the case of a John Doe summons where limitations were suspended under (e)(2), to provide notice of the suspension to the people described in the summons.

Translation: if an exchange fights a John Doe summons for a long time, the years at issue may stay open longer than you think. That matters when you are deciding whether an old crypto year is closed. See how far back the IRS can audit crypto.

What the exchange has to hand over

Once a court authorizes service, the exchange receives the summons and must assemble the records. IRC 7609(i)(1) requires the summoned party to proceed to assemble the records requested and be prepared to produce them. IRC 7609(i)(3) protects a summoned party that discloses records in good faith reliance on a court order: it “shall not be liable to any customer or other person for such disclosure.”

So the exchange cannot be sued for complying. That is why exchanges fight scope in court, before production, rather than after.

What the records include depends on what the court allows. In Coinbase, the court enforced the summons for taxpayer ID number, name, date of birth, address, records of account activity including transaction logs, and periodic statements, and it refused other categories like know-your-customer files and correspondence. Details in the Coinbase summons breakdown.

What the IRS does with the data

The statute does not dictate what happens next, and I will not pretend to know what the IRS did with any specific production. What we can see from the public record is the pattern. Exchange data identifies customers. The IRS compares those customers to what they filed. Then it acts, by letter, by examination, or not at all.

In 2019 the IRS mailed Letters 6173, 6174 and 6174-A to more than 10,000 taxpayers, saying the names came from “various ongoing IRS compliance efforts.” See the three letters compared. The taxpayer in Harper alleged that his letter traced to the Coinbase summons.

Can you challenge a John Doe summons?

In practice, not much, and usually not in time. You are not entitled to notice, so you cannot use the 20-day quash procedure. Once records are produced, the First Circuit held in Harper that a customer has no protectable Fourth or Fifth Amendment interest in the exchange’s records of his account, and it rejected his statutory challenge on procedural grounds. The Supreme Court denied review on June 30, 2025.

The more useful question is not whether you can stop the summons. It is what you do once you assume the IRS has the data.

What to do if you were a customer during a summons window

Assume the records are in IRS hands. Then work the problem the same way you would after a letter.

  • Pull your own records for the same years from the exchange, if they still exist, so you see what the IRS sees.
  • Compare them to the returns you filed, year by year.
  • Identify which years are open under IRC 6501, keeping in mind the possible suspension under 7609(e)(2).
  • Correct open years where the reporting was wrong, and get legal advice first if the amounts are large or the history looks like concealment.

A John Doe summons is not an accusation against you. It is a net. Whether you end up in it depends on what you filed.