The United States’ Internal Revenue Service (IRS) says that a recent meeting with other global tax authorities has given it much deeper insight into how to track those using cryptocurrency to avoid paying taxes. The meeting comes as part of a renewed effort from the IRS to clamp down on tax avoidance facilitated by digital currency.
Collectively known as the Joint Chiefs of Global Tax Enforcement, representatives of tax authorities from the US, UK, Australia, Canada, and the Netherlands shared their own experiences dealing with the issue of cryptocurrency tax avoidance at the recent forum. The IRS now believes it is more equipped than previously to go after those attempting to hide from the taxman under the guise of cryptocurrency.
“Dozens” of Suspects
The authority claims to have identified “dozens” of suspects thanks to its new knowledge. Bloomberg cites special agent at the IRS’s Criminal Investigations office Ryan Korner. He commented the following on the meeting:
“We have tools in place that we didn’t have six months or a year ago.”
He added that the new information gleaned from the IRS’s overseas partners has allowed it to track suspects connected with previous cases. The expanded data set at the meeting reportedly allows for a much greater level of scrutiny into criminal money flows.
In a statement following the meeting, the joint chiefs wrote:
“Tax fraud is not a new crime, but the sophistication with which criminals commit tax fraud has significantly increased through cyber-related activities in recent years.”
The meeting is the latest in a series of efforts to ensure that cryptocurrency users are paying tax. Earlier this year, the US tax agency sent more than 10,000 letters to individuals, warning that their activities with digital currencies might be considered taxable.
IRS Regulatory Changes
Last month, BeInCrypto reported on amendments to one of the IRS’s taxation reporting documents. Form 1040 now asks if “at anytime during 2019 did you received, sell, send, exchanged or otherwise acquire any financial interest in any virtual currency”.
The US tax authority also issued further guidance on how it expects cryptocurrency users to report their tax. The previous lack of clarity led to great confusion and likely contributed to the overall lack of tax reporting that now concerns the IRS.
Even more recently, sources suggested that the agency has plans to send out another batch of the letters it sent this summer.
Per Judith McNamara of the IRS, based on new data that the IRS has, it will likely be sending out more audit notices soon in addition to the initial 10,000 letter campaign that was sent out in August.
— Crypto Tax Girl (@CryptoTaxGirl) October 23, 2019
Images courtesy of Twitter, Shutterstock.
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