United States IRS Requests Industry Giants To Report Customer’s Crypto Activity
It looks like the United States’ Internal Revenue Service (IRS) is trying to be the Ministry of Plenty from George Orwell’s 1984. A recent presentation by IRS shows the guidelines of how the government body should act when crypto citizens are not paying taxes. It asks that the IRS agents question relatives of the offender, comb through social media posts and issue subpoenas to find the offense.
The story was broken by popular Twitter user Crypto Tax Girl.
I recently got hold of a presentation given to special agents in the IRS Criminal Investigation division that discussed investigating taxpayers who hold crypto.
I went through all of the 181 horribly formatted slides (attached for reference haha) and here's what I learned… pic.twitter.com/YQqHVR5Dv7
— Crypto Tax Girl (@CryptoTaxGirl) July 8, 2019
She says that the IRS has plans to use interviews, open-source searches, electronic surveillance, social media searches, and Grand Jury subpoenas given to a variety of companies. One would think that the subpoenas would be served to crypto exchanges, however, the IRS has a different plan. They intend to use them on Apple, Google, and Microsoft in order to search through taxpayers' download history to see if they have ever downloaded cryptocurrency applications.
The 180-page long presentation was made by James Daniels, who is the Program Manager of Cyber Crimes at the IRS. Just last month IRS led by Daniels held a webinar that explained the basics of cryptocurrencies and their tax implications. This presentation, in many ways, looks like a sequel of the last presentation.
One of the fascist approaches that the agency wants to take is creating use of block explorers to remove aspects about the time and the number of cryptos implicated in the transaction.
“Once a Bitcoin Address is identified, it can be looked upon a Bitcoin Blockchain Explorer to find information such as value, transaction times, transaction locations, which may help in corroborating information, identifying additional addresses and locating the subject.”
This might be a bit of a fault on the citizens using cryptos. Selling crypto for cash, paying for goods and services, trading one crypto for another, mining, and being paid or receiving an airdrop are all taxable events. Nonetheless, the data implies people aren’t paying taxes on their cryptocurrency.
Although IRS-CI is a very efficient organization with over 3,100 employees and 2,200 special agents and a conviction rate of over 92%. Tax fraudsters should be aware that these agencies are becoming better at surveillance around cryptos and are at higher risk of getting caught.