- The IRS has gained authorization to order two companies, Circle and Poloniex, to share data on U.S. based investors.
- The regulator is seeking data on U.S. taxpayers who made transactions of at least $20,000 between 2016 and 2020.
- U.S. regulators have many tax efforts underway.
Share this article
The IRS will likely gain access to records from two crypto companies, Circle and Poloniex, to root out tax evasion among U.S. investors.
Circle and Poloniex Will Share Data
According to the U.S. Department of Justice (DoJ), a federal court in the District of Massachusetts has authorized the Internal Revenue Service (IRS) to issue summons to Boston-based blockchain payments firm Circle and its former subsidiary Poloniex.
The legal action will ask Circle and Poloniex to share data on U.S.-based customers who conducted crypto transactions worth at least $20,000 between 2016 and 2020.
This type of order is known as a John Doe summons, an investigative tool deployed by the IRS to seek data on specific U.S. individuals who may have failed to comply with federal tax laws.
“The John Doe summons is a step to enable the IRS to uncover those who are failing to report their virtual currency transactions properly. We will enforce the law where we find systemic non-compliance or fraud,” IRS Commissioner Chuck Rettig wrote.
The DoJ’s official announcement clarified that it does not allege that Circle was involved in any wrongdoing. Instead, the action is part of an “investigation of an ascertainable group or class of persons” that the agency suspects are non-compliant with U.S. tax laws.
Regulators Have Other Tax Efforts Underway
The order is another example of how U.S. regulators have increased their efforts to monitor the cryptocurrency sector. In previous years, crypto exchange Coinbase has become well known for cooperating with the IRS and reporting user trading activity.
Separate from the IRS’s efforts, the U.S. Treasury and FinCEN plan to enforce KYC rules for self-hosted crypto wallets. The regulation would make it mandatory for cryptocurrency firms in the U.S. to record personal data associated with transactions above $3,000 and report crypto transactions over $10,000.
At the time of writing this author held Cosmos.
Circle Using USDC Stablecoin to Aid Venezuela Crisis
Circle is partnering with the Bolivarian Republic of Venezuela and Airtm to distribute its stablecoin USDC. Organized with support from the U.S. government, the initiative has been conceived as a…
What Are Non-Fungible Tokens (NFTs)?
Tokenization is well-suited for commodities like fiat currencies, gold, and physical land. A fungible asset’s representation on blockchain makes commodities tradable 24/7 via borderless and frictionless transactions. Fungible goods are…
Visa Issuing Card for USDC Payments on Ethereum
Visa is doubling down on stablecoins. The credit card giant has announced a collaboration with Circle, the team behind the Ethereum-based token USDC. The partnership will give Visa’s network of…
Coinbase Urges FinCEN to Reconsider Rushed Crypto Regulations
Coinbase penned a letter to Kenneth Blanco, FinCEN’s director, in which the firm urged the regulator to reconsider their drastic proposal and extend the comment period to 60 days. FinCEN…