IRS Wishes to Team Up With Crypto Companies to Battle Crime

A special agent from the IRS told the Wall Street Journal that the agency wishes to work with crypto companies to fight financial crime. He told the WSJ that the goal was a ‘symbiotic relationship.‘

The United States Internal Revenue Service (IRS) is hoping to partner with crypto companies to fight crime in the industry. The Wall Street Journal reported that the atop IRS law enforcer said that “cryptocurrency was here to stay,” and as such, the agency would want to work with crypto companies.

Thomas Fattorusso, a special agent in charge of IRS-CI’s New York field office, told the WSJ that the criminal investigations unit of the IRS was onboarding hundreds of new personnel. Fattorusso was not hostile towards the asset class, saying, “We can’t be hostile to the technology. We have to embrace it.”

He also noted that the asset class is becoming more legitimate and sophisticated. As such, he wishes to cooperate with crypto companies with the goal of having a “symbiotic relationship.” He said,

“That’s something that we’re always working toward. I can’t say whether we’re receiving that or not, but that’s always the end goal, to have those partnerships…more of a symbiotic relationship. It helps them in their legitimacy. This is a new industry for everybody. I think we’re still trying to feel our way around it. The companies are feeling their way around it.”

Fattorusso was also optimistic about the agency hiring younger, more tech-savvy personnel that could help with that goal. This would certainly help the agency, which has been picking up its crypto-related efforts.

Now NFTs Must Be Reported in Tax Form

The IRS recently released a new draft of crypto reporting rules for the tax year of 2022. One of the most significant changes is that taxpayers must also report NFTs. The form 1040 draft also stated that crypto purchases made through PayPal and Venmo would not need reporting.

The IRS has made multiple revisions to tax reporting related to crypto over the years. It appears to be forming a cohesive rule set for the asset class.

The IRS is not slacking off when it comes to tackling crypto-related crimes either. A court order issued in September 2022 allowed the IRS to go after those who did not pay crypto taxes. The John Doe summons related to the crypto transaction data of broker SFOX. This could be the start of more such orders.

It’s clear that, like other authorities in the country, the IRS is ramping up its efforts to control the crypto market. On the positive side, all such authorities wish crypto entities to operate as long as it is within the boundaries of the law.