IRS to summon users who don’t report and pay tax on crypto transactions

With the growth of the crypto community and as trading volumes reach new heights, the United States is also doing more to ensure that its Internal Revenue Service (IRS) can properly collect crypto tax. -currencies.

U.S. Attorney Damian Williams, Assistant Deputy Attorney General David Hubbert and IRS Commissioner Charles Rettig announced that U.S. Judge Paul Gardephe authorized the IRS to issue a “John Doe Summons,” a term used when the IRS Investigating Unknown Taxpayers.

The summons compels New York-based bank MY Safra to submit information on taxpayers who may have failed to report and pay taxes on their crypto transactions. According to the announcement, the IRS is specifically interested in users of the SFOX crypto exchange.

The IRS believes that even though crypto users are required to report profits and losses, there is a significant lack of compliance by taxpayers when it comes to digital assets. According to Williams, the government will use all of its tools to identify taxpayers and make sure everyone pays their taxes. He explained that:

“Taxpayers are required to fairly report their tax obligations on their returns, and obligations arising from cryptocurrency transactions are not exempt.”

On the other hand, Rettig said the authorization of John Doe’s summons supports their efforts to ensure taxpayers getting into crypto “pay their fair share.”

Related: Tax Expert Says Purchasing Crypto Isn’t a Taxable Event

Meanwhile, crypto analytics firm Coincub recently published a study that shows which countries are the worst when it comes to crypto taxation. Belgium ranked first for its 33% capital gains tax and 50% withholding tax on trading income. Finalists include Iceland, Israel, the Philippines and Japan.

On September 6, the Australian government consulted the public on a new law that excludes crypto from being considered a foreign currency when it comes to taxation. The government has given the public 25 days to submit their opinion on the proposal. If enacted, the definition of digital currency in the countries Goods and Services Tax Act will be revised.