A California federal judge allowed the Internal Revenue Service to issue ‘John Doe’ subpoenas on the SFOX Inc crypto broker and its affiliates.
The IRS is specifically seeking information on US taxpayers who conducted at least the equivalent of $20,000 in crypto transactions and did not report it between the years 2016 and 2020.
The records the IRS is looking for are Americans who have engaged in business with or through SFOX Inc., a digital currency dealer headquartered in San Francisco, California, and who have filed their taxes on their tax filings. The funds have not been declared.
“The information sought by the summons approved today will help ensure that cryptocurrency owners are complying with tax laws,” said David A. Hubert, deputy assistant attorney general for the Justice Department’s tax department.
The IRS Is Asking for Tax Cheating
The summons to be issued comes at a time when the IRS is considering new tax reporting requirements and working to crack down on defaulters. The John Doe subpoena, authorized by the US Supreme Court in 1975 in United States v. Bisseglia and later codified by Congress, has long been a powerful tool used by the IRS to combat tax fraud schemes and for cryptocurrency transactions. Will get detailed information about
IRS Commissioner Chuck Rattig said, “The John Doe summons remains a highly valuable enforcement tool that the US government will use time and again to catch tax fraud, and this is yet another example of that.” “I urge all taxpayers to come into compliance with their filing and reporting responsibilities and avoid compromising themselves in schemes that may ultimately turn out badly for them.”
Similar summons issued to Coinbase and Mastercard
According to the statement, cryptocurrencies have been described as difficult to trace and have an inherently pseudo-anonymous aspect, allowing taxpayers to use them to hide taxable income from the IRS. It will investigate individuals who have failed to comply with US tax laws.
In the past, the IRS has used the John Doe Summons to identify individuals who have failed to pay their tax obligations by serving credit card companies such as MasterCard and Visa. It has also gained information on cryptocurrency exchanges such as Coinbase.