The approaching tax filing deadline has prompted the IRS to ramp up its efforts in combating tax evasion related to cryptocurrencies. To aid in this endeavor, the IRS has partnered with blockchain analytics firms, such as Chainalysis, that provide tools for tracking crypto asset ownership and transactions.
At the recent Chainalysis Links event in New York, IRS Criminal Investigation Chief Guy Ficco revealed that the IRS is placing a greater emphasis on addressing cryptocurrency-related tax evasion. Ficco warned of an expected increase in tax fraud cases stemming from inadequate reporting of cryptocurrency transactions during the current tax season. This shift from traditional financial crimes to explicit tax violations signifies a significant change in the nature of crypto-related offenses.
Ficco further elaborated on the IRS’s enhanced capability to monitor and prosecute these crimes during a discussion recorded in a CNF YouTube video. This increased scrutiny is made possible through partnerships with blockchain analytics companies like Chainalysis. Ficco emphasized the importance of compliance, advising taxpayers to accurately report all profits from cryptocurrency sales in order to avoid potential legal consequences.
In his remarks, Ficco underscored the crucial role of public-private collaborations in addressing crypto-related crimes. Companies like Chainalysis play a vital role by providing essential tools and expertise to trace crypto asset ownership and analyze transaction patterns. Ficco praised Chainalysis and other partners for their assistance in cracking down on crypto crimes.
Moreover, Ficco highlighted the unique skills possessed by his team of IRS special agents, many of whom hold accounting degrees. While they excel at following the money trail, the tools and applications provided by their partners are essential for investigating crypto transactions, particularly those designed to obscure true ownership.
Despite experiencing a 10.02% decline over the previous week, Ethereum (ETH) is currently trading at $3,258, reflecting a 7.41% increase over the past day. This volatility serves as a reminder of the importance of robust tax strategies and accurate reporting for U.S. residents managing portfolios that contain Ethereum, Bitcoin, and Litecoin.
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