Home CryptocurrencyBitcoin The IRS is bracing for an increase in crypto cases in the upcoming tax season

The IRS is bracing for an increase in crypto cases in the upcoming tax season

by SuperiorInvest

Criminal Investigation Division of the US Internal Revenue Service (IRS). it’s tax season with a focus on the crypto community.

According to a Bloomberg Law report, division head Jim Lee said they are preparing “hundreds” of cases involving cryptocurrencies, many of which will soon be available to the public.

Lee said there has been a big shift in digital asset investigations by the IRS in the past three years. Previously, these investigations were mainly related to money laundering, whereas now tax-related cases account for almost half.

This includes what is often called “off-ramping” transactions, where digital assets are exchanged for fiat currency non-reporting of crypto payments.

In another report issued by the agency on Nov. 3, the IRS said that in 2022 2,077 special agents of the division they spent almost 70% of their time investigating tax crimes such as tax evasion and tax fraud. The remaining 30% was spent on money laundering and drug trafficking cases.

The head of the division said that following the money is nothing new and they are ready to move into new spheres, including Web3.

“We’ve been doing this for over 100 years and have followed criminals into the dark web and now into the metaverse.”

As an example, the report cited a cryptocurrency-related case that involved tracking billions of dollars in bitcoins stolen from Bitfinex after it was hacked in 2016 and led to the arrest of two people.

Related: 74% of Public Agencies Feel Underequipped to Investigate Cryptocurrencies: Report

This comes after the IRS rolled out a broader “Digital Assets” category ahead of the upcoming tax season. She grouped cryptocurrencies, stablecoins and non-fungible tokens (NFTs) all together in the new “Digital Assets” category.

As decentralized financial technologies and assets become more common, regulators respondtherefore, it enforces more reporting requirements.

Binance was actively organizes workshops for global regulators better understand digital assets and their implications. Those activities increased after the exchange hired a prominent IRS cybercrime investigator to lead its anti-crime unit.

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