Crypto Tax Frauds on IRS Radar Amid Market Boom

A recent update from the Internal Revenue Service (IRS) crime unit reveals that its investigation unit, which played a pivotal role in the investigation of Binance Holdings Ltd., is currently witnessing a notable uptick in cases related to cryptocurrency tax evasion. Jim Lee, the chief of the IRS’s criminal investigation division, shared this information during a press briefing held on Monday, December 4.

Are Crypto Investors Evading Taxes?

Jim Lee highlighted a significant shift in the nature of crypto-related investigations over the past three years. In the past, the majority—over 90%—of active cryptocurrency investigations primarily focused on money laundering. However, in the last year, Lee noted that approximately half of the ongoing digital asset probes are around tax-related issues.

💸 The euphoria surrounding #Bitcoin crossing $40K over the weekend (and $42K today) continues trending across #crypto platforms. And with major 2023 gains for most traders, we see rising discussions related to taxes with less than 4 weeks left in 2023. https://t.co/tWfwkguyEV pic.twitter.com/qiSx6Ot7QN
— Santiment (@santimentfeed) December 4, 2023

The investigations undertaken by the IRS criminal investigation division also encompass a spectrum of concerns. These range from instances where taxpayers neglect to report income arising from capital gains or mining activities to cases where individuals intentionally withhold information about their cryptocurrency holdings. Besides, the IRS has outlined the details of these investigations in the division’s latest annual report, which covers the period from October 1, 2022, through September 30.

Starting from the tax year 2019, the Internal Revenue Service (IRS) has mandated individuals to declare their cryptocurrency transactions. This directive is also a component of a broader initiative aimed at curbing tax evasion related to digital assets.

Regulators are taking crypto tax matters into their hands not only in the US but across the world. The United Kingdom’s tax agency, Her Majesty’s Revenue and Customs (HMRC), has issued a clear and decisive directive to users of cryptocurrency. On the other hand, Brazil is also looking to tax users for their crypto profits.

IRS Combating Crypto Crime

Bhushan is a FinTech enthusiast and holds a good flair in understanding financial markets. His interest in economics and finance draw his attention towards the new emerging Blockchain Technology and Cryptocurrency markets. He is continuously in a learning process and keeps himself motivated by sharing his acquired knowledge. In free time he reads thriller fictions novels and sometimes explore his culinary skills.

The presented content may include the personal opinion of the author and is subject to market condition. Do your market research before investing in cryptocurrencies. The author or the publication does not hold any responsibility for your personal financial loss.

Source: https://coingape.com/crypto-tax-frauds-on-irs-radar-amid-market-boom/