IRS to summon crypto players who don't pay tax

By: Michael Wilson

IRS to summon crypto players who don't pay tax

September 24, 2022 2:54 AM

The summons requests that M.Y. Safra Bank provide details on customers who owe taxes on cryptocurrency but haven't filed or paid them.


When it comes to crypto transactions, the Internal Revenue Service (IRS) will be calling in the big guns if users don't report and pay their dues.


The United States is making greater efforts to ensure that its Internal Revenue Service (IRS) could properly collect cryptocurrency tax as the crypto community grows and trading volumes reach new highs.

 

After U.S. judge Paul Gardephe gave the IRS permission to investigate unidentified taxpayers, U.S. Attorney Damian Williams, Deputy Assistant Attorney General David Hubbert, and IRS Commissioner Charles Rettig made the announcement.

 

M.Y. Safra Bank of New York, New York, is under legal obligation to disclose information regarding customers who may have failed to report and pay taxes on cryptocurrency transactions. The IRS is reportedly targeting customers of the SFOX cryptocurrency exchange.

 

The Internal Revenue Service (IRS) is concerned that crypto users are not complying with the reporting requirements for gains and losses. Williams claims the government will use all available means to track down tax cheats and force honest citizens to pony up. As he elaborated, when filing tax returns;

 

 "taxpayers are required to truthfully report their tax liabilities," and "tax liabilities that arise from cryptocurrency transactions are not exempt,"

 

However, Rettig argued that the John Doe summons' approval bolsters their efforts to ensure that taxpayers who dabble in crypto "pays their fair share."


Meanwhile, Coincub, a cryptocurrency analytics firm, has published a report detailing which nations have the most onerous crypto tax policies. Capital gains in Belgium are taxed at 33%, and 50% of trading income is withheld. Iceland, Israel, the Philippines, and Japan are some close runners-up.

 

The Australian government solicited feedback on a proposed new law on September 6 that would prevent cryptocurrencies from being treated as a foreign currency for tax purposes. The government allowed citizens 25 days to submit comments on the plan. Should it become law, the Goods and Services Tax Act of the countries will change how virtual currency is defined.