If You Used Poloniex and Did Not Report Your Crypto…

…now is a very good time to amend your tax returns to include those cryptocurrency gains and losses.  The Department of Justice announced that a federal court in Massachusetts ordered Circle Internet, the former parent company of Poloniex, and Poloniex to provide a list of all U.S. taxpayers who conducted at least $20,000 of transactions from 2016 through 2020.  This is a “John Doe” summons, and is the same tactic the IRS used to get this information from Coinbase.

I would expect it will be at least 30 days before the information releases the Department of Justice, and then several more weeks (to months) before the IRS starts comparing the lists of individuals with Poloniex transactions to filed tax returns.  If you forgot to include Poloniex sales on your tax returns (or if your actions were more deliberate), you have a window to act.  It is almost always better to come clean to the IRS before they send you a notice.

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