Enhanced Cryptocurrency Tax Investigations According to IRS Team Report

According to the 2023 financial report, the IRS launched an investigation into the failure to disclose cryptocurrency holdings and report capital gains from transactions.

Enhanced Cryptocurrency Tax Investigations According To Irs Team Report_65b97d629b587.webp

The Criminal Investigation (CI) Unit of the United States Internal Revenue Service (IRS) has just announced a significant increase in the number of investigations related to digital asset reporting.

📊 Our FY23 Annual Report highlights more than 2,600 investigations, $37.1 billion identified from tax and financial crimes. #IRSC #ByTheNumbers#WhatWeDoCounts
https://t.co/B1hZw8ClXm pic.twitter.com/EZWQKNB2uu

— IRS Criminal Investigation (@IRS_CI) December 4, 2023

In its annual report released on December 4, the IRS investigation agency said it prosecuted more than 2,676 cases, which identified more than $37 billion in tax and financial crimes. in fiscal year 2023. Accordingly, CI observed a significant increase in the use of digital assets, leading to increased tax investigations.

“These investigations include unreported income from failure to declare capital gains from cryptocurrency sales, income obtained from cryptocurrency mining activities, or income received in the form of cryptocurrency death, such as wages, rental income and gambling winnings,” said a statement from the Crimes Unit. “CI also documented tax avoidance, where taxpayers did not disclose cryptocurrency ownership in order to avoid controlling holdings.”

enhanced cryptocurrency tax investigations according to irs team report 65b97d629e82c

Since 2019, the IRS began requiring U.S. taxpayers to report details of digital asset transactions, a requirement that the IRS continues to add to tax forms every year. In the report, CI Director Jim Lee said that “most people using cryptocurrencies do so for legitimate purposes,” but digital assets carry with them the risk of financing terrorism, ransomware and other illegal activities.

Related: Bitcoin Price Surge Boosts Altcoin Market Capitalization to Find New Support Levels

Since it began ramping up efforts to investigate cryptocurrency crimes in 2015, the IRS has seized more than $10 billion in digital assets. The government agency has also proposed new regulations on reporting requirements of brokers to reduce tax evasion cases.

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