As the crypto community continues to grow and transaction volumes reach new highs, the United States is also stepping up efforts to ensure that the Internal Revenue Service (IRS) can properly collect cryptocurrency taxes.
U.S. Attorney Damian Williams, Deputy Assistant Attorney General David Hubert and IRS Commissioner Charles Rettig announced that U.S. Judge Paul Gardoff has authorized the IRS to issue “John Doe subpoenas” used when investigating undocumented taxpayers.
The subpoena compels New York-based MY Safra Bank to report on their crypto transactions and provide information on taxpayers who failed to pay taxes. According to the announcement, the IRS is specifically looking into users of crypto exchange SFOX.
The IRS believes that there is a significant lack of compliance from taxpayers when it comes to digital assets, even though crypto users are required to report profits and losses. According to Williams, the government will use all its tools to identify taxpayers and ensure that everyone pays their taxes. He explained.
“Taxpayers must truthfully report their tax liabilities on their returns, and liabilities from cryptocurrency transactions are not exempt.”
Rettig, on the other hand, said that granting the John Doe subpoena would support efforts to ensure that taxpayers “pay their fair share” of what they invest in crypto.
Related: The tax expert says that buying crypto is not a taxable event
Meanwhile, crypto analytics firm Coincub recently released a study showing which countries are worst when it comes to crypto taxation. Belgium ranks high with a 33% tax on capital gains and a 50% withholding tax on corporate income. Winners of the tournament include Iceland, Israel, the Philippines and Japan.
On September 6, the Australian government consulted the public on a new law that would prevent crypto from being treated as a foreign currency for tax purposes. The government has given a period of 25 days for the people to share their opinion on the proposed proposal. If signed into law, the definition of digital currency will be revised in the countries’ Goods and Services Tax Act.