The IRS Has Been Given Permission to Access Details on Circle's Users in Order to Catch Tax Evaders
By Jamie G. - Crypto Professional - 02-04-2021
The IRS will investigate customer details from fintech platform Circle on all U.S. taxpayers who exchanged at least $20,000 from trading cryptocurrency between 2016 and 2020.
The Internal Revenue Service, or IRS, has been given permission by a U.S. federal court to serve a John Doe summons on the company, requesting details and data on U.S. taxpayers that exchanged at least $20,000 in crypto assets on its networks between 2016 and 2020.
The summons will be served on Circle Internet Financial Inc. and all of its predecessors, branches, divisions, and affiliates, namely Poloniex LLC. As per the statement from the Department of Justice, Judge Richard Stearns found that there is a reason to believe “that cryptocurrency users may have failed to comply with federal tax laws."
“We're evaluating [the summons] and, of course, plan to work cooperatively with the IRS in reacting to the court order,” a Circle spokesperson told Law360. Attorney General David Hubbert mentioned how people who trade cryptocurrency need to follow the law and pay their taxes as everyone else does. In addition to this, he stated how the Justice Department will work with the IRS to ensure that those who invest in cryptocurrency pay their share of taxes.
Circle was established in October 2013 by Jeremy Allaire and Sean Neville, and the following year the company released a Bitcoin (BTC) investment wallet, which later developed into its crypto buying app, Circle Pay. Circle introduced USD Coin (USDC) in conjunction with Coinbase in 2018, and it is now the second largest stablecoin by market value.
Circle acquired the successful digital asset exchange Poloniex in 2018, but declared the following year that Poloniex will venture into a new company supported by an investment team with links to Tron's Justin Sun.