Saturday, May 15, 2021

The IRS Is Coming for Crypto Investors Who Haven’t Paid Their Taxes

Two new IRS efforts to find crypto tax evaders stand out: In April, a federal judge in Boston approved an IRS summons to the payments company known as Circle and its affiliates, including Poloniex, to turn over customer records to the agency. And in early May, a federal judge in San Francisco approved another IRS summons for records to the crypto exchange known as Kraken. In both cases, the turnover applies to customers who had more than $20,000 in transactions in any year from 2016 through 2020, reports The Wall Street Journal.

“With these summonses and other actions, the IRS is mounting a full-court press to show taxpayers how seriously it takes cryptocurrency compliance,” says Don Fort, a former chief of IRS criminal investigation now with Kostelanetz & Fink. “Taxpayers should take it seriously too.”

To justify the new searches of Kraken and Circle, the IRS divulged some results of its Coinbase campaign. In court filings, the agency said it has received more than 1,000 amended tax returns and collected $13 million from crypto holders with more than $20,000 of transactions, plus another $12 million from other crypto notices, and audits are ongoing.

Some Coinbase customers have entered the IRS’s Voluntary Disclosure program for taxpayers with criminal liability. This program usually lets participants out of prosecution but imposes large penalties.

In the case of Kraken, it may have to turn over phone numbers and email addresses as well as the customer’s name, date of birth, taxpayer ID number, and physical address. 

Have I mentioned that cryptocurrencies are extremely trackable?


(ht Christopher Barcelo)


  1. "Have I mentioned that cryptocurrencies are extremely trackable?"

    Yes, RW, you have mentioned that cryptocurrencies are extremely trackable.

    What have you not mentioned? Privacy coins. (Maybe that's for the best because your wont for making glib comments in this area is not always helpful.)


  2. Isn't everything trackable now?

    Maybe cash still isn't.
    Who in the world is only using cash now? Nearly everyone used debit credit cards which are super trackable.