- IRS received authorization to issue a John Doe summons to M.Y. Safra Bank.
- The summons asks the bank to submit information about possible evasion of crypto tax payments by taxpayers.
- IRS is specifically looking into the customers of SFOX.
In one of the latest press releases by the United States Department of Justice, it was revealed that the Internal Revenue Service (IRS) received authorization from the US District Judge to issue a John Doe summons to the M.Y. Safra Bank.
The order requests information from the bank regarding the taxpayers’ details to look into possible crypto tax evasion. The IRS summons specifically asks for information on SFOX clients who have used banking services that M.Y. Safra Bank provided to SFOX customers doing crypto transactions.
The IRS stated in the summons that it has identified major tax compliance deficiencies related to transactions that involved cryptocurrencies.
Damian Williams, the US Attorney, stated that:
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.
David A. Hubbert, a deputy assistant attorney general, also stated that taxpayers who are dealing with crypto should be aware that gains and income from crypto transactions fall under the tax bracket.
The John Doe summons orders M.Y. Safra to deliver the documents the IRS needs to locate U.S. taxpayers who were SFOX clients.
It will also help the IRS identify those who may not have properly disclosed their cryptocurrency transactions on tax forms. In addition, on August 15, the U.S. District Court for The Central District of California gave the IRS permission to serve a John Doe summons on SFOX directly.