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The court order, stemming from a legal battle that began in May 2021, requires <a href="https://financefeeds.com/kraken-to-delist-usdt-dai-and-other-stablecoins-in-canada/" rel="noopener noreferrer nofollow">Kraken</a> to provide details of customers’ transactions exceeding $20,000 between 2016 and 2020. The information includes users' account histories, personal details such as names, dates of birth, Tax IDs, addresses, and contact information. This compliance is specifically targeted at users based in the United States who participated in the specified transactions.
<a href="https://financefeeds.com/coinbase-kraken-and-gemini-stay-silent-on-xrp-listing-after-secs-appeal/" rel="noopener noreferrer nofollow">Kraken</a>, while adhering to the court's decision, frames its compliance as a victory for privacy rights. The company asserts that it contested the IRS's initial demands, which sought even more extensive personal data. As a result, the court reduced both the number of affected clients and the amount of client data required.
This isn't the first instance of a crypto exchange being mandated to share user data with the IRS. In 2018, Coinbase informed 13,000 of its users that it would provide their taxpayer IDs, names, birth dates, addresses, and transaction records from 2013 to 2015 to the tax authority. The U.S. Court of Appeals is currently reviewing a related case where a Coinbase user, James Harper, is appealing against the IRS to limit the government's access to users’ transaction histories.
In September 2022, a federal court authorized the IRS to issue a so-called John Doe summons for taxpayers who may have failed to report and pay taxes on cryptocurrency transactions.
Specifically, the order enabled <a href="https://financefeeds.com/crypto-us-treasury-and-irs-propose-reporting-rules-for-brokers/" rel="noopener noreferrer nofollow">the IRS</a> to collect information about customers of cryptocurrency prime broker SFOX. The summons required M.Y. Safra Bank to produce information concerning SFOX customers who conducted at least $20,000 in transactions in cryptocurrency between 2016 and 2021.
The IRS said it plans to make public criminal <a href="https://financefeeds.com/irs-dealing-cryptocurrency-profits/" rel="noopener noreferrer nofollow">tax-evasion cases</a> involving cryptocurrency, which opens a new front in the agency’s burgeoning scrutiny of the industry.
As described further in the petition, though taxpayers are required to report any associated profits and losses on their crypto dealings, the IRS’s experience “has demonstrated significant tax compliance deficiencies relating to cryptocurrencies and other digital assets.”
Based on its recent experiences with cryptocurrencies, the IRS believes that crypto transactions are not being properly reported on tax returns.&nbsp; Among other reasons, the authority says there is no third-party reporting to the IRS on such transactions, and previous summonses served on other cryptocurrency dealers have revealed significant underreporting of such transactions.

Kraken to disclose data of its crypto traders to US taxman

FinanceFeeds

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