The United States Internal Revenue Service says it’s gearing up for a significant rise in crypto tax crime cases going forward, as U.S. citizens hit the deadline to file their taxes on April 15.
Speaking to CNBC at the Chainalysis Links event in New York, IRS criminal investigation chief Guy Ficco said his agency was getting ready to deal with an uptick in cases of tax fraud and evasion that have come along with it. A Title 26 tax code refers to citizens who willfully evade paying taxes by lying or obfuscating their reporting documents.
Ficco noted that while crypto had previously been used mostly as a tool in financial crimes such as fraud, scams, and money laundering, his agency had recently observed a drastic uptick in “pure crypto tax crimes,” and expected even more in the near future.
He mentioned that his agency has partnered with blockchain analysis firm Chainalysis as well as several other law enforcement agencies to better crack down on crypto crime. Ficco highlighted the importance of leveraging specialized expertise in the crypto space.
Ficco also outlined some basic rules for those looking to file their taxes properly and not get stung by the IRS. He emphasized the importance of accurately reporting gains and losses from crypto transactions to ensure compliance.
Ficco said his agency had grown more aggressive when investigating and prosecuting U.S. citizens who had either failed to report their crypto taxes in the past as well as those who had actively obfuscated or lied on their tax return.
On Feb. 6, a federal grand jury indicted Texas man Frank Richard Ahlgren III with filing false tax returns avoiding reporting requirements on more than $4 million worth of gains made on Bitcoin.
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