US Court Authorizes IRS to Summon Cryptocurrency User Records From Circle and Poloniex

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US Court Authorizes IRS to Summon Cryptocurrency User Records From Circle and Poloniex

The Internal Revenue Service (IRS) has received permission from a federal court to obtain cryptocurrency user information from exchanges Circle and Poloniex. The IRS wants data that identifies crypto users who made $20,000 or more in crypto transactions between 2016 and 2020, as well as other documents related to their crypto transactions.

Tax authorities get permission from judge to collect user data crypto currency from Circle and Poloniex

The U.S. Department of Justice (DOJ) announced Thursday that a federal court has granted the IRS permission to file a John Doe lawsuit against Circle Internet Financial Inc. or its predecessors, subsidiaries, divisions and affiliates, including Poloniex. The message reads as follows:

The IRS is seeking information on Americans doing business with or through Circle, a Boston-based digital currency exchange.

Poloniex has been mentioned in the order since Circle bought the cryptocurrency exchange platform in 2018, but split off into a new company, Polo Digital Assets Ltd, the following year.

The DOJ also said the IRS is seeking information on U.S. taxpayers who made at least the equivalent of $20,000 in cryptocurrency transactions between 2016 and 2020. The Justice Department said the IRS is asking Circle to produce documents identifying the U.S. taxpayers described above, as well as other documents related to their cryptocurrency transactions.

The court’s order states that John Doe’s subpoena is for the purpose of obtaining information in connection with an IRS investigation of a particular group or class of persons and that the IRS has reasonable cause to believe that he may have failed to comply with a provision of an Internal Revenue Service statute.

The IRS has already made a similar John Doe request to cryptocurrency operator Coinbase. The company challenged the order for more than a year before it complied with the court’s decision and disclosed the data of about 14,000 customers. According to Coinbase, this resulted in a 97% reduction in the number of customers affected by the scheme.

What do you think about the tax authorities wanting information about crypto currency users? Let us know your comments in the section below.

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