The IRS has been granted permission by a federal court to demand information from the Kraken exchange concerning any customers that conducted at least US$20,000 worth of cryptocurrency transactions between 2016 and 2020
The US Internal Revenue Service (IRS) has been authorised by a federal court to serve summons against the Kraken cryptocurrency exchange as American authorities seek to crack down on tax dodgers.
On Wednesday, the federal court in the Northern District of California authorised the IRS to serve a John Doe summons to Payward Ventures Inc, Kraken’s parent company, in order to obtain information about taxpayers that conducted at least US$20,000 worth of cryptocurrency transactions through the exchange between 2016 and 2020.
READ: HMRC to demand crypto assets info from taxpayers
“Gathering the information in the summons approved today is an important step to ensure cryptocurrency owners are following the tax laws. Those who transact with cryptocurrency must meet their tax obligations like any other taxpayer”, said David A. Hubbert, acting assistant attorney general of the Justice Department’s Tax Division.
John Doe summons are used by the IRS as a summons for a tax investigation when the relevant taxpayer is unknown to authorities and cannot be identified by name.
While Kraken itself is not being accused of wrongdoing, the summons form another segment of a growing crackdown by the IRS on those seeking to avoid paying tax on crypto assets, which the federal government considers property.
In April, crypto payments firm Circle received a federal court order to deliver identifying documents for its customers engaged in similar crypto transactions.
Similar activities are underway on the other side of the Atlantic, with UK tax and customs authorities to begin demanding information on holdings in cryptocurrency for taxpayers that it investigates for tax evasion and avoidance