The Internal Revenue Service (IRS) continues to scale up its activities to find dodgers among cryptocurrency users. Following the approval of Circle’s customer disclosure request, the Department of Justice made a similar request for the Kraken exchange.
The tax department of the ministry has filed a petition with the Northern District of California. The department asks the court to approve the issuance of information to taxpayers, whose names have yet to be determined. If approved, the IRS will be able to request data from Payward Ventures Inc., the operator of Kraken, as part of an ongoing investigation. The issuance will be subject to the data of customers whose transaction volume from 2016 to 2020 reached $ 20,000.
The court has already reacted to the request, calling it “overly broad” and recommended to reapply after limiting the scope of the investigation, writes The Block.
The IRS wants basic information about user registration, identification and transactions. The Court considers this appropriate, but does not agree with the need to disclose “full user preferences” and “any other records of information” about customers, as well as “correspondence between Kraken and users or any third parties with access to the accounts.” The IRS claims that such information will help in identifying an account or multiple accounts for a user.
Coinbase was in dispute with the IRS for a similar request in 2016. After limiting the scope of the requested information, the court granted the department’s appeal.