There are two scenarios: the IRS has sent a subpoena directly to you for your records, or your exchange has notified you that the IRS obtained your records through a John Doe summons. Both are serious. Both require immediate action. Neither should be handled without an attorney.

Direct Summons to You

An IRS summons under §7602 compels you to appear and produce records. Failure to comply can result in a federal court order to comply, and continued failure is contempt of court — punishable by imprisonment. However, you have rights: you can invoke the Fifth Amendment privilege against self-incrimination for testimony (though not for pre-existing documents), you can challenge the summons on procedural grounds, and you should have an attorney present.

Exchange Notification

When the IRS serves a John Doe summons on your exchange, the exchange may notify you that your records have been produced. This notification means the IRS now has your complete transaction history from that exchange. They will match it against your filed returns. If there is a discrepancy, expect contact from the IRS — either a compliance letter, a CP2000 notice, or an examination.

Immediate Steps

Do not contact the IRS yourself. Do not file amended returns without professional guidance. Do not destroy records. Do retain a tax attorney immediately — attorney-client privilege protects your communications from the moment of retention. Have the attorney evaluate your exposure: what did you report, what did the IRS receive, and what is the gap?

Voluntary Correction Window

If the IRS has obtained your exchange records but has not yet contacted you directly about a discrepancy, a narrow window exists for voluntary correction. Filing amended returns or delinquent returns before the IRS initiates contact changes the dynamic from adversarial to cooperative — and dramatically reduces the risk of criminal referral.

Attorney Representation

Attorney Darrin T. Mish responds to IRS summonses and manages the fallout from exchange data disclosures. The key is speed — the earlier professional representation begins, the more options remain available. Thirty-two years of IRS practice. Free consultation.