The head of the IRS investigation expects significant growth in crypto tax fraud this year.
The U.S. Internal Revenue Service says it is preparing for a sharp increase in crypto tax crime cases as Americans extend the April 15 deadline to file their taxes.
Speaking to CNBC at a Chinalysis Links event in New York, IRS Chief of Criminal Investigations Guy Fico said the agency is preparing to combat tax evasion and related fraud.
“There will be 26 crypto cases heading this year and many more to come.”
Title 26 of the tax code refers to citizens who evade paying taxes by lying or hiding their reporting documents.
Ficco said in the past that crypto has been used as a tool in financial crimes such as fraud, embezzlement and money laundering – however, the agency has recently noticed a drastic increase in “pure crypto tax crimes” and says more is expected. In the near future.
“It could be just not reporting income from crypto sales, it could be hiding the true basis of crypto, and that's an area that I expect to increase,” Ficco said.
He mentioned that the agency has partnered with blockchain analytics firm Chinalysis and other law enforcement agencies to better manage crypto-crimes.
“My IRS special agents are amazing at tracking and tracing money, but some of the tools and applications that are needed in the crypto world – that's where Chinalysis experts come in,” he said.
Ficco outlines some basic rules for those who want to file their taxes correctly and are not dictated by the IRS.
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“Basic law means you have a basis in the property. When you dispose of the property […] Your selling point is your attitude,” Fico said.
“If you get something for $10,000 and sell it for $20,000 – you have a $10,000 profit and that's something you have to pay taxes on.”
His agency has become more aggressive in investigating and prosecuting U.S. citizens who previously failed to report their crypto taxes, as well as those who actively cheated or lied on their tax returns, Ficco said.
In the year
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