The Internal Revenue Service (IRS) is serious about tracking down cryptocurrency, according to a recent Twitter post by user @CryptoTaxGirl. The post purports to show a slide presentation used to train special agents in tracking down cryptocurrency tax evaders.

The user is a Certified Public Accountant specializing in cryptocurrency tax payments. Her lengthy tweet thread also contained a link to the actual slides themselves, as well as the contact name and number of James Daniels, the person in charge of the training.

Backdoor Principles?

The documents appear to instruct the agents to use secondary means to track cryptocurrency users. Rather than simply serving subpoenas to cryptocurrency exchanges for trade histories, the IRS plans to serve Google, Apple, and Microsoft to find if taxpayers have ever even downloaded cryptocurrency applications.

Additionally, the slides indicate that the agency will subpoena banks, credit card companies, and payment platforms like PayPal. By obtaining records of this kind, they can track payments that were made to or from companies accepting cryptocurrency — an easy way to track funds.

What’s more, the slides teach that special agents should be careful to not inform the taxpayers about these subpoenas. The stated reason is that such notification could hamper a thorough investigation.

“Notification of the Subject about the obtainment of information regarding their use of bitcoin may be detrimental to the seizure of any bitcoin balance.”

cryptocurrency tax

IRS: Play Now or Pay Later

The information, taken together, seems to indicate that the IRS is seeking new and more complex ways of tracking cryptocurrency users. By searching secondary tools for Bitcoin transactions, the agency is able to determine which taxpayers are most likely to be auditable.

The information only further highlights the need for tax honesty among the cryptocurrency community. For those who have claimed their earnings and paid taxes appropriately, there is little to fear from deeper investigation.

However, for those who are seeking to use Bitcoin as a safe haven from the prying eyes of the IRS, the news may come as a shock. If federal investigators are able to track down cryptocurrency user data, audits may be forthcoming.

Long story short, cryptocurrency users are like any other taxpayer with two choices. Everyone must choose to either play nice with the IRS or pay later when audited.

Do you think the new investigation methods that the IRS is using will result in increased audits or do most cryptocurrency users report their incomes appropriately? Let us know your thoughts in the comments below!


Images courtesy of Twitter, Shutterstock. 

As a trusted news outlet in the blockchain and cryptocurrency industry, BeInCrypto
always strives for the highest journalistic standards and adheres to a strict set
of editorial policies. BeInCrypto is an independent website with authors and management
that may personally invest in cryptocurrencies or blockchain startups.

The post IRS Allegedly Hunting Cryptocurrency Users For Tax Evasion appeared first on BeInCrypto.

Source
Author: Jon Buck

Categories: Legal

0