Circle Informs Clients of IRS Inquiry Into $20K Annual Transactions

Numerous advocates of digital currencies report that Circle Internet Financial has been reaching out to its clients about a summons received from the Internal Revenue Service (IRS). Circle has stated that it is obliged to submit records concerning U.S. taxpayers who have engaged in transactions amounting to at least $20,000 annually during the years 2016 to 2020.

Crypto Firm Circle Addresses IRS Summons on User Transactions Exceeding $20,000

Circle, a crypto company and stablecoin issuer has been informing its U.S. clientele via email about its intention to adhere to a summons from the IRS. This summons, issued on April 9, 2021, targets Circle and its associated subsidiaries. According to the email from Circle, the IRS is seeking data on clients who transacted $20,000 or more in any year from 2016 through 2020. Previously, Circle offered crypto assets like bitcoin (BTC) to its retail customers and briefly owned Poloniex.

Circle has since ceased both these operations; it no longer possesses Poloniex and has discontinued its earlier practice of selling digital currencies to retail investors. Circle detailed in the email to clients that it was informing them that Circle plans to comply. “We are writing to inform you that we are complying with this summons which requires us to produce information specific to your account,” the company’s email said.

Circle’s correspondence adds:

If you have any concerns about this, we encourage you to seek legal advice from an attorney.

Circle’s announcement comes on the heels of a similar situation involving Kraken, where the IRS issued a summons to the San Francisco-based crypto exchange, seeking details on customers with yearly trading volumes exceeding $20,000 from 2016 to 2020. Similarly, the San Francisco-based publicly traded platform, Coinbase, was also mandated by the IRS in 2018 to hand over customer information.

Circle communicated that the issue regarding the summons is still unresolved, even after six months. In their correspondence, the company alerted the recipients that the compliance might pertain to tax filings for the years 2016 to 2020 and it suggests that users who believe they may have a tax obligation should seek advice from a tax professional.

What do you think about Circle’s message to U.S. clients about the IRS summons? Share your thoughts and opinions about this subject in the comments section below.