Corridor Consulting Responds to Kraken’s Compliance with IRS Information Requests and Advises Proactive Measures for Crypto Users
In an unprecedented move impacting the cryptocurrency landscape, Kraken, a leading cryptocurrency exchange, has finally announced to its users its compliance with the IRS’s request to disclose complete transaction details of its users. The data, spanning from 2016 to 2020, includes personal information such as names, dates of birth, tax IDs, addresses, and detailed transaction records.
This development follows a court ruling which effectively pauses the statute of limitations clock for the IRS, giving them extended time to assess and take potential legal action against affected taxpayers regarding tax returns for the years 2016 to 2020. The implications of this are significant for Kraken’s users, as it allows the IRS ample time to scrutinize the provided data for any misreporting or omission of taxable crypto transactions.
What You Need to Know and Do
James Yochum, CPA, LSSGB at Corridor Consulting and a notable figure on X/Twitter reporting on crypto tax accounting compliance issues (@JTheAccountant), emphasizes the urgency for those affected to seek professional guidance.
- For Users Who Filed Taxes: It is crucial to have your returns and crypto transactions reviewed by a CPA to ensure accuracy and compliance.
- For Those Who Haven’t Filed: Contact a CPA experienced in crypto-related tax matters without delay.
- For Deliberate Underreporting: If you have intentionally underreported your crypto transactions, consulting with a lawyer specializing in criminal tax cases is essential. The IRS has the authority to escalate tax evasion cases to criminal charges.
Global Tax Enforcement’s Rising Proficiency in Crypto Analysis
Recent developments highlight the growing capability of tax enforcement agencies globally in tracking and analyzing cryptocurrency transactions. The Joint Chiefs of Global Tax Enforcement (J5) and IRS Criminal Investigation Division’s participation in “The Challenge” events, focusing on cryptocurrency and associated tax crimes, is a testament to their enhanced proficiency in this arena. These organizations are increasingly adept at tracing crypto transactions to individuals, even without direct KYC (Know Your Customer) information.
The Role of Users and the Importance of Compliance
This unfolding scenario signals a more vigilant and capable IRS in dealing with cryptocurrency, extending beyond KYC-compliant users to potentially include non-KYC participants like those using private wallets and decentralized exchanges in the crypto space. As these developments continue, Corridor Consulting urges all cryptocurrency users and investors to prioritize compliance and seek expert advice to navigate this complex and evolving landscape.
If you need further help with these issues please schedule a consultation to become a client with us here.
About Corridor Consulting
Corridor Consulting is a premier CPA firm specializing in comprehensive financial services, including tax planning, compliance, and cryptocurrency-related advisory. With a commitment to integrity and excellence, Corridor Consulting remains at the forefront of financial advisement in an ever-changing digital economy.
Corridor Consulting content is for education and information only. This is not legal or tax advice of any kind. Please consult with your Attorney or Certified Public Accountant so they can better understand your personal facts and circumstances and give you advice.
