The IRS is issuing John Doe Summons to Catch Crypto Traders
Steve PerryMany virtual currency traders once believed their transactions weren’t taxable, but the IRS has since cracked down. Traders often misunderstood that exchanges—like banks—can be compelled to disclose user data through a legal tool called a **John Doe Summons**, without notifying the taxpayer. A landmark court case involving **Coinbase** affirmed the IRS's authority to use this method, rejecting challenges based on the Fourth and Fifth Amendments due to the exchange’s status as a third party. This case serves as a clear warning: **Don’t try to hide income from the IRS.** The agency has powerful tools to uncover unreported income and assets, especially in crypto. Failing to report can result in steep penalties and interest. On the other hand, reporting a non-taxable transaction has no downside. Always be transparent with your tax professional. For expert guidance on cryptocurrency tax issues, call **Books, Taxes & More** at **678-717-9818** and ask for **Steve**.