IRS Identifies Dozen of Crypto "Criminals": Bitcoin Crackdown 14

IRS Identifies Dozen of Crypto “Criminals”: Bitcoin Crackdown

It seems that the IRS isn’t taking the crypto threat too lightly. The American tax agency just revealed that it has properly identified “dozens” of potential criminals that are using things like Bitcoin to purportedly perpetrate (and perpetuate) their crimes.

Bloomberg reported that there was a meeting held between officials from the U.S., U.K., Canada, and the Netherlands — a tax-officiating group known as the Joint Chiefs of Global Tax Enforcement. At the meeting, the entities shared “data, tools and tax enforcement strategies” in a bid to find those trying to participate in ” mitigate cross-border money-laundering, tax evasion, and cybercrime.” On the matter of why they’re focusing on digital technologies, specifically crypto assets, the Joint Chiefs wrote:

“Data breaches, intrusions, takeovers and compromises are the new tools that criminals use to commit tax crimes.”

This news comes amid a clear concerted effort from the IRS and other tax agencies to curb the use of cryptocurrency, presumably including assets from Bitcoin to Monero, in criminal activity.

Last month, the IRS began to circulate a draft of the new Form 1040, Schedule 1, Additional Income and Adjustments to Income. The draft has the following question right at the top:

“At any time during 2019, did you receive, sell, send, exchange, or otherwise acquire any financial interest in any virtual currency?”

Just before that, the IRS revealed its latest guidance on cryptocurrency taxes — the first guidance of its kind in some five years. The guidance addressed cryptocurrency forks, along with the acceptable methods of evaluating digital assets received as income, and how to calculate taxable gains.

Crypto Crackdown 

Part of this crackdown is affecting exchanges too.

Speaking to an audience at a fintech event at the Georgetown University Law Center, Director of the U.S. Treasury branch of the Financial Crimes Enforcement Network (FinCEN) Kenneth Blanco said that cryptocurrency firms are not above AML laws.

Firms dealing with digital assets, he remarked, are still subject to the Bank Secrecy Act, “whether you are a stablecoin, centralized, decentralized crypto.” He asserted that this has to be the case due to the potential that individuals on the other side of cryptocurrency transactions might be “dealing in some kind of illicit activity,” be it “opioids or human smuggling.”

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