Court Authorizes IRS Fishing Trip Against Crypto Prime Dealer
A court authorized the Internal Revenue Service to serve a John Doe summons on a cryptocurrency prime dealer in California.
On August 15, 2022, a federal court in the Central District of California entered an order authorizing the IRS to serve a John Doe summons on sFOX. The IRS is seeking information about any U.S. taxpayers who transacted at least $20,000 in cryptocurrency through the platform.
“sFOX is the full-service crypto prime dealer for institutional investors, providing the liquidity, security, and infrastructure needed to unlock the full potential of digital assets.”
“Taxpayers who transact with cryptocurrency should understand that income and gains from cryptocurrency transactions are taxable,” said Deputy Assistant Attorney General David A. Hubbert of the Justice Department’s Tax Division. “The information sought by the summons approved today will help to ensure that cryptocurrency owners are following the tax laws.”
sFOX claims to help its users 'secure their edge in crypto.'
“The John Doe summons remains a highly valuable enforcement tool that the U.S. government will use again and again to catch tax cheats and this is yet one more example of that,” said IRS Commissioner Chuck Rettig. “I urge all taxpayers to come into compliance with their filing and reporting responsibilities and avoid compromising themselves in schemes that may ultimately go badly for them.”
In the court’s order, United States District Court Judge Otis D. Wright found that there is a reasonable basis to believe that people transacting $20,000 or more might not be complying with tax laws. The John Doe summons allows the IRS to obtain information about all U.S. taxpayers who use the sFOX without knowing their identity. “This John Doe summons directs SFOX to produce records identifying U.S. taxpayers who have used its services, along with other documents relating to their cryptocurrency transactions,” an announcement explained.
Court Authorizes Service of John Doe Summons Seeking the Identities of U.S. Taxpayers Who Have Used Cryptocurrency | , archive.is, archive.org
