The Internal Revenue Service (IRS) of the United States is getting ready to crack down harder on cryptocurrency-related tax fraud starting in 2024. This was said by Guy Ficco, who is in charge of criminal investigations at the IRS, in an interview with CNBC at the Chainalysis Links event in New York.
Ficco said that the IRS expects more “Title 26 crypto cases” throughout 2024. This was said just a few days before the April 15 deadline for crypto taxes in the United States. Title 26 of the US Code has laws that are specifically meant to stop tax evasion. Tax evasion is when someone tries to avoid paying taxes on purpose by doing illegal things like lying about their income or hiding assets abroad.
IRS Combats Rise In Crypto Tax Crimes.
In the past, cryptocurrencies were mostly linked to financial crimes like fraud, scams, and moving money. Ficco did, however, point out a recent rise in “pure crypto tax crimes,” such as failing to report income from crypto sales and hiding the real value of crypto assets.
The IRS has formed agreements with groups like Chainalysis and other law enforcement agencies to help it fight crypto-related crimes. Ficco stressed the importance of using specialized tools to handle cryptocurrency trades, recognizing that these systems have their own problems when compared to traditional ones.
Not only that, but Ficco said that the IRS is paying more attention to U.S. citizens who have forgotten to report their crypto taxes or lied on their tax forms. Recently, the federal government took steps like charging Frank Richard Ahlgren III from Texas with filing false tax returns on Bitcoin gains worth over $4 million. His comments are similar to those of those people.
Taxing cryptocurrencies is a source of worry not just in the US, but around the world as well, with regulators working to improve how they tax digital assets. The ruling Liberal Democratic Party in Japan has asked the government to speed up changes to crypto taxes. In South Korea, Gyeonggi province put in place a new system in February 2024 to stop crypto tax fraud, which led to the recovery of $4.6 million in unpaid taxes.
