On May 5, 2021, a federal court in the Northern District of California authorized the IRS to serve a John Doe summons on Payward Ventures, Inc., and Subsidiaries d/b/a Kraken, to obtain information on U.S. taxpayers who had at least $20,000 in cryptocurrency transactions between 2016 and 2020. The Department of Justice notes that gathering this information is an important step to ensure that cryptocurrency owners follow the tax laws and pay tax on any gains on the sale of cryptocurrency.
While cryptocurrency is a digital representation of value, virtual currencies that can be converted into traditional currency are property, for tax purposes, thus resulting in a gain or loss on the exchange.
To read the Department of Justice’s complete article, click here.
