Authorities Ask Cryptocurrency Exchanges to Submit Taxpayer Data

The United States tax authority (Internal Revenue Service / IRS), asked one of the cryptocurrency exchange organizers, Circle, to submit data regarding taxpayers who make transactions on its platform.

The IRS move is a follow-up to the District Court's decision for the District of Massachusetts to allow the IRS to access the data from Circle as the organizer of the exchange.

"Those who transact cryptocurrency must fulfill their tax obligations like other taxpayers. The Department of Justice will work closely with the IRS to ensure taxpayers who conduct cryptocurrency transactions pay their tax portion," said Acting Assistant Attorney General David Hubbert, quoted on Tuesday (6 / 4/2021).

In particular, the IRS asked Circle to submit data regarding taxpayers who were buying and selling cryptocurrencies worth US $ 20,000 or more. Transaction data submitted for the period 2016 to 2020.

IRS commissioner Chuck Rettig said this move was part of the tax authorities' efforts to maintain taxpayer compliance. "This allows the IRS to examine taxpayers who do not report their taxes properly. We will enforce the law for non-compliance and fraud," Rettig said in his official statement.

Not only that, this time the IRS also asked Kraken to report data regarding the implementation of know your customer (KYC) to data regarding correspondence between Kraken and users to third parties with accounts.

The IRS argues that a wide range of data and information is required to find out whether taxpayers have 2 or more accounts to transact cryptocurrency through exchanges.

The data request from Kraken is still being processed at the District Court for the Northern District of California. Where permitted, Kraken must submit the requested data and information to the IRS. (kaw)