
Igor S. Drabkin
A federal district court in California issued an order on December 23, 2024, authorizing the IRS to serve a John Doe summons on JustAnswer LLC, a digital platform through which various professionals, such as doctors, lawyers, veterinarians, engineers and tax professionals, were paid for answering questions as “experts” during the 2017-2020 tax years. The IRS is seeking the records of individuals who were paid by JustAnswer LLC.
The court’s order grants the IRS permission to serve what is known as a John Doe summons on JustAnswer. The IRS uses John Doe summonses to obtain information about individuals whose identities are unknown and who possibly violated internal revenue laws, such as by not reporting income they received. This John Doe summons directs JustAnswer to produce records identifying U.S. taxpayers who have used its platform to earn income, along with other documents relating to their work.
This case illustrates the IRS’ and Department of Justice’s focus on enforcing tax compliance for the “gig economy”. The “gig economy” is where people earn income providing on-demand work, services or goods through a digital platform like a website or an app. Digital platforms commonly serve as intermediaries, connecting sellers or service providers with customers while also processing payments. In the court’s order, U.S. District Judge Dolly M. Gee for the Central District of California found that there is a reasonable basis for believing that U.S. taxpayers who were paid by JustAnswer to answer questions as experts may have failed to comply with federal tax laws.Federal law requires U.S. individual taxpayers to pay taxes on all income earned worldwide. Individuals must report all income earned from the gig economy on a tax return. This includes income from part-time, temporary or “side work”; income not reported on an information return form (like a Form W-2 or 1099) or other income statement; or income paid in cash, property, goods or digital assets.
Igor S. Drabkin is a Certified Tax Law Specialist by the State Bar of California and former Senior Trial Attorney with the IRS Office of Chief Counsel. He devotes his skills and experience to representation of clients who are in disputes, or have compliance issues, with the Internal Revenue Service and State taxing authorities, both administratively and in court. He litigates cases in all federal and state courts and represents clients in tax audits, fraud and criminal investigations, administrative appeals, tax collection and bankruptcy matters. Holtz, Slavett & Drabkin, APLC is a tax controversy and tax litigation law firm consisting of former IRS trial attorneys. We represent taxpayers in all aspects of tax disputes with the IRS and state tax authorities, including penalty abatement requests. To schedule a consultation, please contact us at (310) 550-6200 or idrabkin@hsdtaxlaw.com.