Damian Williams, the United States Attorney for the Southern District of New York, David A. Hubbert, Deputy Assistant Attorney General for the Justice

IRS Obtains Court Order Authorizing Summons For Records Relating To U.S. Taxpayers Who Failed To Report And Pay Taxes On Cryptocurrency Transactions | USAO-SDNY | Department of Justice

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2022-09-23 06:30:13

Damian Williams, the United States Attorney for the Southern District of New York, David A. Hubbert, Deputy Assistant Attorney General for the Justice Department’s Tax Division, and Charles P. Rettig, Commissioner of the Internal Revenue Service (“IRS”), announced that U.S. District Judge Paul G. Gardephe entered an order on September 22, 2022, authorizing the IRS to issue a so-called John Doe summons requiring M.Y. Safra Bank to produce information about U.S. taxpayers who may have failed to report to the IRS, and pay taxes on, cryptocurrency transactions. Specifically, the IRS summons seeks information about customers of SFOX, a cryptocurrency prime broker, who used banking services that M.Y. Safra Bank offered to SFOX customers engaged in cryptocurrency transactions. As described further in the IRS’s petition in support of the summons, though taxpayers who transact in cryptocurrencies are required to report any associated profits and losses on their tax returns, the IRS’s experience has demonstrated significant tax compliance deficiencies relating to cryptocurrencies and other digital assets.

U.S. Attorney Damian Williams said: “Taxpayers are required to truthfully report their tax liabilities on their returns, and liabilities that arise from cryptocurrency transactions are not exempt. The government is committed to using all of the tools at its disposal, including John Doe summonses, to identify taxpayers who have understated their tax liabilities by not reporting cryptocurrency transactions, and to make sure that everyone pays their fair share.”