Tuesday, April 13, 2021

The IRS receives green light to request information about customers of Circle.

The Takeaway:

The Internal Revenue Service (IRS) has received a green light to request information about certain customers of cryptocurrency payments company Circle.

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The US Internal Revenue Service (IRS) can now check whether customers of the crypto payments firm Circle filed their taxes correctly. The IRS is chasing after customers who traded at least $20,000 in crypto from 2016 through 2020. The summons, authorized yesterday by a Massachusetts federal court, grants IRS the power to unmask customers of the Boston-based crypto firm who have failed to report their virtual currency transactions in tax returns.

 

IRS will enforce the law where we find systemic non-compliance or fraud.

“We will enforce the law where we find systemic non-compliance or fraud,” said IRS Commissioner Chuck Rettig in a statement. The summons also authorizes the IRS to rifle through the accounts of Poloniex–the cryptocurrency trading platform that Circle bought for $400 million in 2018. In October 2019, Poloniex split from Circle, shutting off its US customers. The Department of Justice did not specify whether the court ruling affects users of USD Coin–the US dollar-pegged stablecoin that Circle launched together with the crypto exchange Coinbase back in 2018. 

 

“Those who transact with cryptocurrency must meet their tax obligations like any other taxpayer.”

“Those who transact with cryptocurrency must meet their tax obligations like any other taxpayer,” added David Hubbert, an acting assistant attorney at the Justice Department’s Tax Division, in a statement. However, the order does not allege that Circle, which has raised $271 million to date, is necessarily guilty of any wrongdoing in connection with its cryptocurrency exchange business. Lately, the IRS has been pushing US taxpayers into disclosing cryptocurrency transactions. Earlier in 2017, the IRS had ordered the crypto exchange Coinbase to share records of some 14,000 customers. Governments around the world have shown urgency in recent times to regulate the crypto industry. 

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Disclaimer: The article reflects the opinions of the author and is not representative of Chaintimes’ views.
The article does not offer any investment advice. User discretion is advised when investing in or trading with cryptocurrency. Extensive and diligent research should be carried out by the reader before making a decision.

Jai Pratap
Jai Pratap
A Mass Media Graduate who loves to write. Jai is also a sports enthusiast and a big movie buff. He loves to learn new things.

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