IRS Authorized to Get Records from Kraken for US Taxpayers Transacting at least $20k In Crypto

IRS Authorized to Get Records from Kraken for US Taxpayers Transacting at least $20k In Crypto

This summon approval is an “important step” to ensure crypto owners follow the tax laws, says Acting Assistant Attorney General.

A federal court in the Northern District of California has authorized the Internal Revenue Service (IRS) to serve a John Doe summons on the cryptocurrency exchange Kraken, seeking information about U.S. taxpayers who have used crypto, said the Department of Justice.

The IRS is seeking information about taxpayers who conducted at least $20,000 in transactions in crypto between 2016 and 2020.

According to the court’s order, the summons seeks information related to the IRS’s “investigation of an ascertainable group or class of persons” that the agency said it has a reasonable basis to believe may have failed to comply with its laws.

The IRS has directed Kraken to provide them with records identifying these U.S. taxpayers along with other documents relating to their crypto transactions.

“Gathering the information in the summons approved today is an important step to ensure cryptocurrency owners are following the tax laws,” said Acting Assistant Attorney General David A. Hubbert of the Justice Department’s Tax Division. “Those who transact with cryptocurrency must meet their tax obligations like any other taxpayer.”

The official statement from DOJ further goes on to note that because transactions in digital assets can be difficult to trace and also have an inherently pseudo-anonymous aspect, “taxpayers may be using them to hide taxable income from the IRS.”

On April 1, 2021, IRS was also granted the order to serve a similar John Doe summons on Circle.

“There is no excuse for taxpayers continuing to fail to report the income earned and taxes due from virtual currency transactions,” said IRS Commissioner Chuck Rettig. This summons, according to him, will help them uncover those who are “trying to skirt reporting and avoid paying their fair share.”

However, DOJ does not allege that Kraken has engaged in any wrongdoing, clarified the agency.

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Author: AnTy

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