IRS anticipates more crypto-related tax crime as filing deadline looms: report
Quick Take
- An IRS investigation chief said that there is a growing number of “pure” tax evasion crimes related to cryptocurrencies.
- The IRS is working with firms from the private sector to trace tax delinquents using crypto.
The U.S. Internal Revenue Service is expecting to see a lot more tax evasion crimes linked to cryptocurrencies this year, its criminal investigation chief Guy Ficco told CNBC at the Chainalysis Links event.
The IRS investigation chief told CNBC on Saturday that he is noticing more “pure crypto tax crimes,” whereas previously, crypto’s illicit use was predominantly associated with larger frauds such as scams and embezzlements.
“This could be purely not reporting income generated from crypto sales, it could be hiding the true basis of crypto,” said Ficco.
The agency is expected to charge the crypto-related tax evasion more aggressively as it expects to see more cases this year and going forward, according to the IRS official.
For tracking crypto tax delinquents, the IRS is working with several partners, including blockchain analytics firm Chainalysis. “My IRS special agents are phenomenal at tracing and following money, but some of the tools and applications that are needed when we start investigating in the crypto world with obfuscation of true ownership,” said Ficco, adding that that’s where IRS utilizes the help from companies like Chainalysis.
The tax filing deadline for U.S. taxpayers is April 15.
Disclaimer: The Block is an independent media outlet that delivers news, research, and data. As of November 2023, Foresight Ventures is a majority investor of The Block. Foresight Ventures invests in other companies in the crypto space. Crypto exchange Bitget is an anchor LP for Foresight Ventures. The Block continues to operate independently to deliver objective, impactful, and timely information about the crypto industry. Here are our current financial disclosures.
© 2023 The Block. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.
