The IRS continues to chase U.S. taxpayers who failed to report and pay taxes on cryptocurrency transactions with a new court order allowing a summons for customer records. The agency will issue a so-called “John Doe summons” requiring M.Y. Safra Bank to turn over crypto transaction data for SFOX, a digital currency prime broker that used the bank, with more than 175,000 users and over $12 billion in transactions since 2015, according to the U.S. Department of Justice. It’s not the first IRS summons for crypto records, but it’s unusual because the broker seems to be “quite small,” signaling the possibility of more to come, said Andrew Gordon, tax attorney, CPA and president of Gordon Law Group in Skokie, Illinois. “The IRS has indicated this is a very high priority for them,” Gordon added. While the first summons for crypto tax records triggered IRS letters for unreported income and unpaid taxes, the response took a few years, said Matt Metras, an enrolled agent and cryptocurrency tax specialist at MDM Financial Services in Rochester, New York. “I’m curious to see what happens with all this data they’re collecting,” said Metras, noting that the IRS may try to match it with investors’ tax returns.
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