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IRS Wins Summons To See If Digital Currency Users Pay Tax

Law360, Washington (December 1, 2016, 1:30 PM EST) -- A California federal court Wednesday authorized a John Doe summons by the IRS to obtain information from virtual currency exchanger Coinbase Inc. so it can investigate whether the company’s customers avoided paying taxes on transactions made through the company.

San Francisco-based Coinbase itself has not been accused by the IRS of engaging in nefarious activity, but the agency believes records of transactions made via the company’s currency exchange business could reveal the identities of individuals who have failed to pay taxes on transactions made via encrypted digital currencies between 2013 and 2015.

“Transactions in virtual currency are taxable just like those...

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Case Information

Case Title

Subscribers Only

Case Number

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Court

California Northern

Nature of Suit

Tax Suits: IRS-Third Party

Judge

Subscribers Only

Date Filed

November 17, 2016

Government Agencies