Identity unknown? If the IRS suspects a person with unknown identity of tax violations, it may ask a court for permission to serve a “John Doe summons” to obtain information. At the same time, the U.S. Dept. of Justice states that cryptocurrency transactions have an “inherently pseudo-anonymous aspect” and may be used to hide taxable income from the IRS. In one case, an individual challenged the IRS’s use of a John Doe summons to obtain his account information from a virtual currency exchange. He argued it was unconstitutional. A U.S. District Court disagreed and ruled that the IRS’s actions “fall squarely” within its powers to pursue unpaid taxes. (Harper, DC NH, 5/26/23)
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