U.S. Federal Court Authorizes IRS to Identify Taxpayers Who Traded Cryptocurrency on Kraken

A federal court in the Northern District of California filed an order on Wednesday authorizing the Internal Revenue Service to serve a summons that would give them access to information on taxpayers who have purchased cryptocurrency.

The new court authorization would allow the IRS to pull records of any taxpayer who invested more than $20,000 into cryptocurrency between 2016 and 2020. The records are specifically in regards to customers of Kraken, a crypto trading platform based out of San Francisco.

“Gathering the information in the summons approved today is an important step to ensure cryptocurrency owners are following the tax laws,” said Acting Assistant Attorney General David A. Hubbert of the Justice Department’s Tax Division in a press release. “Those who transact with cryptocurrency must meet their tax obligations like any other taxpayer.”

The authorization does not imply any wrongdoing committed by Kraken and is designed to help the IRS identify U.S. citizens who skirted taxes with the use of cryptocurrency. 

Cryptocurrency transactions are hard to track and assign to individuals without direct access to the exchange in which they were purchased.

© Fourth Estate® — All Rights Reserved.
This material may not be published, broadcast, rewritten or redistributed.