IRS can request cryptocurrency user records from Circle and Poloniex following court approval

IRS can request cryptocurrency user records from Circle and Poloniex following court approval

The US taxman is coming for its share of cryptocurrency holdings

A US federal court has given the Internal Revenue Service (IRS) the green light to be able to seek all kinds of information about cryptocurrency users who currently have a relationship with crypto exchange platforms Poloniex and Circle. The main idea of the tax authority is to obtain records that can identify all those users who made crypto transactions greater than $20,000 during the period from 2016 to 2020. Other types of documents related to these transactions may also be required for the respective investigation, as well.

The news was announced last Thursday when the Department of Justice (DOJ) indicated that the IRS was authorized by a federal court “to serve a John Doe summons” on “Circle Internet Financial Inc., or its predecessors, subsidiaries, divisions, and affiliates, including Poloniex.” The DOJ explained that “the IRS is requesting that Circle produce records identifying the U.S. taxpayers described above, along with other documents related to their cryptocurrency transactions.”

Based on all of this, the court order has made it clear that the summons of “John Doe” is intended to find information related to the IRS’s investigation of a group of identifiable individuals. This is because the IRS has sufficient reason to believe that this group of individuals may have violated provisions of “internal revenue laws.” A similar summons was also issued to the exchange operator Coinbase. This company refused to budge for about a year, but at the end of the day, it had to comply with the court order as it handed over data of about 14,000 customers.

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