IRS investigation chief expects uptick in crypto tax evasion this year

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The IRS in the United States anticipates a large increase in cryptocurrency tax fraud instances in the future, with the tax filing deadline for Americans approaching on April 15th.

At the Chainalysis Links event in New York, IRS Criminal Investigation Head Guy Ficco spoke with CNBC. He revealed that his team is gearing up to handle a surge in tax fraud and evasion cases.

“There’s going to be a lot more charged Title 26 crypto cases this year and moving forward.”

An individual intentionally avoiding paying taxes as required by the Tax Code outlined in Title 26, through means of deception or concealment in their tax documentation.

Ficco mentioned that cryptocurrencies have historically been linked to financial wrongdoings like fraud, scams, and money laundering. However, his team has recently noticed a significant increase in “crypto-specific tax offenses,” and they anticipate this trend to continue growing.

“Ficco expressed his expectation for a rise in cases where people might not be accurately reporting their cryptocurrency earnings or concealing the source of their crypto assets.”

This agency, as he pointed out, collaborates with Chainalysis, a blockchain analysis company, along with various law enforcement units, to enhance their efforts in combating crypto-related crimes more effectively.

“IRS agents I work with excel at tracking and investigating funds, but when it comes to cryptocurrencies, I rely on the expertise of companies like Chainalysis to provide essential tools and solutions,” he explained.

Ficco provided essential guidelines for filing taxes accurately and avoiding unwanted attention from the IRS.

“According to Ficco, when you sell an asset, the price at which you sold becomes your disposal point, assuming you had originally owned that asset.”

“If you acquire something at $10,000 and you sold it for $20,000 — you have a $10,000 gain and that’s what you need to pay tax on.”

Ficco stated that his agency has become more vigorous in examining and bringing charges against US citizens who neglected to declare their cryptocurrency taxes in previous years, as well as individuals who intentionally hid or provided false information on their tax forms.

On February 6th, a federal grand jury brought charges against Texas resident Frank Richard Ahlgren III. The accusation: he knowingly submitted false tax documents, concealing over $4 million in profits derived from Bitcoin (BTC) transactions that should have been reported.

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2024-04-15 04:05