IRS to target crypto tax evasion with enhanced enforcement in 2024
United States Internal Revenue Service (IRS) criminal investigation chief Guy Ficco has revealed that the regulator is anticipating a rise in crypto crimes.
In an interview with CNBC at the Chainalysis Links event in New York, IRS stagger Guy Ficco noted that there will be an uptick in “Title 26 crypto cases” in 2024. Ficco’s comments came days before April 15, the deadline for filing crypto taxes in the nation.
Title 26 of the United States Code includes specific provisions aimed at addressing tax evasion. Tax evasion typically involves the deliberate underpayment or non-payment of taxes due through illegal means, such as underreporting income, inflating deductions, or hiding money and income offshore.
The IRS exec said that cryptocurrencies had previously been used mostly as tools for various financial crimes, such as fraud, scams, and money laundering. He added that the IRS had recently observed a surge in “pure crypto tax crimes,” noting that such activities are expected to rise further into the year.
“This could be purely not reporting income generated from crypto sales, it could be hiding the true basis of crypto and that’s an area I anticipate an increase in,” Ficco remarked.
According to Ficco, the IRS has partnered with Chainalysis and other law enforcement agencies to enhance its efforts against crypto crimes. He went on to state that while IRS agents are “phenomenal” at following money, the cryptocurrency sector requires the use of special tools.
“That’s where the experts at Chainalysis come in,” he added.
Ficco added that the IRS has grown more hostile when investigating cases involving U.S. residents who have failed to report their crypto taxes or have lied on their crypto tax returns in the past.
The comments from Ficco follow a February 7 indictment from a federal grand jury in a similar case. Frank Richard Ahlgren III, a Texas citizen, was charged with filing false tax returns on over $4 million worth of his Bitcoin gains.
Concerns over cryptocurrency taxes aren’t limited to the United States alone. Regulators all across the globe have been actively working to refine taxation efforts for digital currencies. The latest development came from Japan’s ruling party, the Liberal Democratic Party, which has recently urged the government to carry out “immediate” crypto tax reforms.
Meanwhile, per an earlier Crypto.news report, South Korea’s Gyeonggi province adopted a new system to combat crypto tax evasion in Feb. 2024. The regulators were able to recover $4.6 million in unpaid taxes from defaulters.
