One of the most powerful tools in the Internal Revenue Service arsenal is the John Doe summons. However, as we all learned from Spider-Man, with great power comes great responsibility.
Although it ultimately approved an IRS request to serve a summons for information on the popular cryptocurrency exchange Kraken Inc., the U.S. District Court for the Northern District of California recently reminded the IRS of this principle. Statements in the court’s recent order allowing the summons provide hope for cryptocurrency investors who are worried about their private information being included in the broad net the IRS is casting in an effort to encourage tax compliance.[1]
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