IRS wants to delay court battle with Coinbase

The U.S. Internal Revenue Service (IRS) is taking a step back from its legal battle with bitcoin exchange Coinbase to assess if it needs to take additional action in the case.

New court filings obtained by CoinDesk showed that lawyers for the U.S. tax agency have asked the U.S. District Court for the Northern District of California to delay the hearing set for Feb. 16 until March 23 “because it is weighing whether to take additional action in the case.”

The hearing is for the petitions filed by Coinbase and one of its customers. The two parties wanted the court to formally intervene in their dispute of the legitimacy of IRS’ John Doe summons. If you recall, the California district court allowed the tax agency to require Coinbase to submit records of its customer transactions as part of an investigation into possible tax fraud committed by U.S. residents who engaged in business with or through the bitcoin wallet service.

Lawyer Jeffrey Berns, also a customer of the virtual currency exchange, challenged the order on grounds that the summons “would constitute an abuse of process” and described the IRS’s request to obtain the user records as “overboard.”