US Federal Court Orders IRS to Identify Taxpayers who Have Used Cryptocurrency

    The US Federal Court has provided the official consent to Internal Revenue Service (IRS) to perform “John Doe Summons” on the US-based cryptocurrency exchange and bank, Kraken. A John Doe Summons is an IRS summons approved by Internal Revenue Code Section 7609(f). In contrast to other IRS orders, it does not enumerate the name of the taxpayer under inquiry because the taxpayer is unfamiliar with the IRS.

    The court has awarded permission in order to pinpoint the taxpayers who have used cryptocurrency.  As per the Federal Court Order, IRS is preparing to get information about taxpayers who performed at least $20,000 worth of deals in cryptocurrency from 2016 to 2020. DOJ disclosed that this crackdown is being performed to know whether those who use cryptocurrency fulfill their tax requirements or not like any other taxpayers.

    Furthermore, this consent for IRS is provided by the court to ensure cryptocurrency owners are following the tax laws or not. IRS Commissioner stated that there is no relaxation for the users of virtual currency to earn profit from it but doesn’t meet their tax obligations. This John Doe order is part of the IRS attempt to expose those who are attempting to avoid coverage and are not giving their fair share.