The IRS is stepping up its efforts to fight tax evasion related to cryptocurrencies as the deadline for tax filings approaches.
Blockchain analytics firms like Chainalysis play a crucial role in assisting the IRS by providing tools to track ownership and transactions of crypto assets.
At the recent Chainalysis Links event in New York, IRS Criminal Investigation Chief Guy Ficco revealed that the IRS is intensifying its focus on cryptocurrency-related tax evasion. With the tax season in full swing, Ficco highlighted an expected increase in tax fraud cases due to inadequate reporting of cryptocurrency transactions. This shift from traditional financial crimes to explicit tax violations represents a significant change in the nature of crypto-related offenses.
During a discussion captured in a CNF YouTube video, Ficco explained the IRS’s advanced capability to monitor and prosecute these crimes. This enhanced scrutiny is made possible through partnerships with blockchain analytics companies like Chainalysis.
Ficco emphasized the importance of compliance, reminding taxpayers that they must declare and pay taxes on all profits from cryptocurrency sales. His advice to taxpayers is clear: strictly adhere to reporting requirements to avoid potential legal consequences.
Ficco also highlighted the vital role of public-private collaborations in combating crypto-related crimes. Firms like Chainalysis provide essential tools and expertise to trace ownership of crypto assets and analyze transaction patterns. He praised Chainalysis and other partners for their assistance in cracking down on crypto crimes.
Furthermore, Ficco acknowledged the unique skills of his team, consisting mostly of IRS special agents with accounting degrees. While these agents are excellent at following the money trail, the tools and applications provided by their partners are crucial for investigating crypto transactions, especially those designed to obscure true ownership.
Currently, Ethereum (ETH) is trading at $3,258, experiencing a 7.41% increase in the past day, despite a 10.02% decline over the previous week. As previously reported by CNF, this volatility highlights the importance of robust tax strategies and accurate reporting for U.S. residents managing portfolios that include Ethereum, Bitcoin, and Litecoin.
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