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The IRS announces prosecution of tax evading digital currency holders

Source:

There is a lot of tax revenue that can be earned from this space for the IRS.

According to the source, the process is a joint effort of the IRS’s Anti-Fraud Office and its Criminal Division as well, which will dig up unreported cryptocurrency transactions and hold potential tax evaders accountable.

Roger Brown, Head of Tax and Regulatory Affairs at Lukka, told Lukka that Operation Hidden Treasure is the IRS ‘way of handling matters when it comes to enforcement.

Brown added that since this effort is dealt with jointly with the Criminal Department, deliberate concealment will be specifically considered, rather than the incomplete reporting types that could be classified as civil tax fraud.

He noted:

Because the Fraud Prosecution Office and the Criminal Tax Department do so and not ordinary civilians, they look for evidence of concealment, evidence of intent not to pay what is owed.

Brown cited dark web money transfers, as well as mixers, and services that intentionally block transactions as possible examples of the type of behavior the IRS might target in its investigations.

Cryptocurrency payments tend to be very private in transactions, since they are based on numbers and pseudonyms, but they are also highly transparent, as everything is publicly recorded in the blockchain, making it easy to track transactions.

Cryptocurrency mixers are a service that provides transaction mixing and is a preferred service for criminals looking to launder money on blockchain networks.

Mr. Sheehan Chandrasekara, Head of Tax Strategy, Cointracker, said:

Cryptocurrencies are the worst asset class to evade taxes on because there is a permanent record of your transactions in the blockchain, unlike cash.

He added:

There is a lot of tax revenue that can be earned from this space for the IRS.

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