IRS Wins Court Order to Access Kraken’s Crypto User Data for Tax Compliance

by Jul 3, 2023CryptoNews0 comments

The US Internal Revenue Service (IRS) has won a court order to access the records of cryptocurrency exchange Kraken and its users. The order, issued by a federal court in California, allows the IRS to obtain information about Kraken’s customers who traded more than $20,000 worth of crypto assets between 2016 and 2020. The IRS claims that this data will help it identify and pursue tax evaders who use cryptocurrencies to hide their income and assets. Kraken, which is based in San Francisco, has not commented on the order yet. The exchange is one of the largest and oldest in the US, with over 6 million users worldwide. The IRS has been ramping up its efforts to crack down on crypto tax compliance in recent years. In 2018, it obtained a similar order against Coinbase, another major US exchange, which resulted in the disclosure of about 13,000 user accounts. The IRS has also issued guidance and warning letters to crypto taxpayers, reminding them of their obligations and penalties. According to the IRS, cryptocurrency transactions are taxable events that must be reported on income tax returns. However, many crypto users may not be aware of or follow these rules, leading to a significant tax gap. The IRS estimates that more than 10,000 taxpayers failed to report their crypto income or pay taxes on it in 2017 alone

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