Security News > 2022 > September > Open up, it's the IRS. We're here about the crypto tax you dodged

The IRS has been granted a court order to collect records from a bank the agency said will help it identify US taxpayers who failed to report taxable income from crypto trades.

Uncle Sam yesterday said it's specifically going after records from New York-based bank M.Y. Safra, which partnered with SFOX - a cryptocurrency prime broker - to offer the latter's customers access to cash-deposit bank accounts.

Basically, the IRS reckons people have profited from trading cryptocurrencies via SFOX and M.Y. Safra, and haven't declared that income nor paid the required tax on it, and so the agency wants to chase those people down and strap them into the wallet-emptying ass-kicking machine.

"The John Doe summons directs M.Y. Safra to produce records that will enable the IRS to identify U.S. taxpayers who were customers of SFOX and who engaged in cryptocurrency transactions that may not have been properly reported on tax returns," the agency said.

According to the IRS, its probing into the world of cryptocurrencies has revealed "Significant tax compliance deficiencies" across the industry, and that it "Has strong reason to believe that many virtual currency transactions are not being properly reported on tax returns." That said, there are many people who use cryptocoins for legit purposes, and pay due income taxes on it.

With the data it gathers from M.Y. Safra, the IRS said it expects to be able to match the identities of SFOX users with Safra services "Which the IRS will then be able to use in conjunction with other information to examine whether these users complied with the internal revenue laws."

News URL

https://go.theregister.com/feed/www.theregister.com/2022/09/23/irs_cryptocurrency_income_tax/