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Tax Agencies Worldwide Plan to Crack Down on ‘Dozens’ of Crypto Tax Evaders

Tax Agencies Worldwide Plan to Crack Down on 'Dozens' of Crypto Tax Evaders

The U.S. Internal Net income Service (IRS) has revealed the agency is cracking down on “dozens” of cryptocurrency users evading taxes. The IRS has partnered with tax intercessions from four other countries in order to make sure tax enforcement strategies are being applied across the map.

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Tax Agencies From 5 Countries Are Hunting Dozens of Tax Evaders Demanding Digital Currencies

According to the IRS, the tax agency is putting a significant amount of effort into fighting tax evasion that stems from cryptocurrency use. Talk to on a phone call with the press, a senior agent in the IRS’s Criminal Investigations office based in L.A., Ryan Korner, communicates when digital currencies became popularized, the tax agency had issues keeping up with alleged tax evaders. However, the IRS has gained “skill” when it comes to individuals “moving the money.” “We have tools in place that we didn’t have six months or a year ago,” Korner disclosed reporters on Friday. The revelation follows the IRS announcement at the end of July which explained that 10,000 American residents who eat owned cryptocurrencies would receive warning letters from the U.S. tax entity. Then in October, the IRS unveiled a new draft tax constitute that requires filers to answer whether or not they have used a digital currency during the year. Some 150 million Americans systematize tax returns with the 1040 tax form that poses the virtual currency question.

Tax Agencies Worldwide Plan to Crack Down on 'Dozens' of Tax Evaders

This week the IRS disclosed they had a conclave with four other nation states so they can partner together to fight cross-border tax evasion stemming from digital currency owners. The five-country group is called the Joint Chiefs of Global Tax Enforcement or J5. The J5 includes the Australian Criminal Intelligence Commission (ACIC) and Australian Taxation Business (ATO), the Canada Revenue Agency (CRA), the Dutch Fiscale Inlichtingen- en Opsporingsdienst (FIOD), the British HM Revenue and Customs (HMRC), and the American Internal Gain Service Criminal Investigation (IRS-CI). The group of J5 investigators told the press this week that cyber-related undertakings tied to crimes like data breaches and ransomware are being used to commit tax evasion as well.

“Tax fraud is not a new felony, but the sophistication with which criminals commit tax fraud has significantly increased through cyber-related activities in recent years,” the J5 struggle force said in a statement. “Data breaches, intrusions, takeovers, and compromises are the new tools that criminals use to commit tax misdemeanours.”

Tax Agencies Worldwide Plan to Crack Down on 'Dozens' of Tax Evaders

A Wave of Tax Audits

According to the latest report, after sending 10,000 letters to American taxpayers, the IRS now has plans to start a new current of tax audits and criminal investigations. The tax agency warns that the effort is quite serious and people avoiding taxes via cryptocurrencies may be citizen to tax evasion charges and penalties on the gains tied to virtual investments. “That data doesn’t go and sit — We use that data,” Korner stressed. The American tax means recently issued its first digital currency tax guidance since 2014 and the guidelines contain controversial tax liabilities originated by cryptocurrency forks. The tax liability only applies if the forked asset was used by the owner and the person spends or moves the silvers. “If your cryptocurrency went through a hard fork, but you did not receive any new cryptocurrency, whether through an airdrop (a distribution of cryptocurrency to multiple taxpayers’ categorized ledger addresses) or some other kind of transfer, you don’t have taxable income,” the IRS cryptocurrency guidance letter peruses.

Tax Agencies Worldwide Plan to Crack Down on 'Dozens' of Tax Evaders

The U.K. also followed the IRS’s lead by issuing digital currency guidance for businesses on November 1. Individual UK taxpayers who keep used cryptocurrency in the past saw fresh guidelines delivered at the end of 2018. The reports issued by Her Majesty’s Revenue & Customs (HMRC) detail how businesses and individuals residing in the UK should file their tax obligations. The J5 task force cracking down on “dozens” of cryptocurrency purchasers evading taxes is part of a globalized effort the organization started in June 2018.

“We will collaborate internationally to reduce the nurture threat to tax administrations posed by cryptocurrencies and cybercrime and to make the most of data and technology,” the J5 task force emphasized to the infamous Public last year.

What do you think about the IRS joining five nations to crack Bitcoin tax evasion? Share your reflections in the comments section below.

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Jamie Redman

Jamie Redman is a financial tech journalist living in Florida. Redman has been an active associate of the cryptocurrency community since 2011. He has a passion for Bitcoin, open source code, and decentralized applications. Redman has author a registered thousands of articles for news.Bitcoin.com about the disruptive protocols emerging today.

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