Finance

The IRS is seeking identities of taxpayers who used cryptocurrencies worth at least $20,000 in the past 4 years

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A federal court in California has authorized the Internal Revenue Service to serve a “John Doe Summons” on crypto exchange Kraken, seeking identities of US taxpayers who exchanged cryptocurrencies worth at least $20,000 between 2016 and 2020.

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

IRS Commissioner Chuck Rettig said Americans shouldn’t fail to report the income earned, or taxes due, from virtual-currency transactions, and the watchdog’s summons aims to root out those trying to hide taxable income.

A John Doe Summons enables the IRS to investigate a particular class of people by a federal court sanction. A similar summons was authorized in April on Boston-based crypto finance company, Circle Internet Financial.

Kraken has been directed to produce records identifying taxpayers that match the requested description and other documents relating to their transactions, the Justice Department said.

Under the watchdog’s guidelines for tax consequences, virtual currencies are treated as property and not as currency.

Read the original article on Business Insider
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