IRS Ramps Up Crypto Tax Investigations as Financial Crimes Surge

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Published: December 05, 2023 at 2:06 am Updated: December 05, 2023 at 2:06 am

Edited and fact-checked:
December 05, 2023 at 2:06 am

In Brief

The IRS’s Criminal Investigation Unit reported a significant increase in investigations around digital asset reporting in the fiscal year 2023, reflecting the agency’s intensified focus on tax evasion and financial crimes involving cryptocurrencies.

The US Internal Revenue Service’s (IRS) Criminal Investigation (CI) Unit has noted a marked increase in investigations related to digital asset reporting in the fiscal year 2023.

The IRS’s CI Unit reported initiating over 2,676 cases, uncovering more than $37 billion related to tax and financial crimes. The increase in cases is partly attributed to the rise in the usage of digital assets, leading to more tax investigations.

The CI Unit’s annual report highlighted the complexity of investigating unreported income from cryptocurrency transactions. These include capital gains from cryptocurrency sales, income from mining, and cryptocurrency received as wages or other income types.

Our FY23 Annual Report highlights more than 2,600 investigations, $37.1 billion identified from tax and financial crimes. #IRSC #ByTheNumbers #WhatWeDoCounts
https://t.co/B1hZw8ClXm pic.twitter.com/EZWQKNB2uu

— IRS Criminal Investigation (@IRS_CI) December 4, 2023

IRS Enhanced Focus on Money Laundering and Cybercrimes

The IRS has expanded its focus to include tax fraud, money laundering and cybercrimes. In fiscal year 2023, the CI obtained an 88.4% conviction rate in cases accepted for prosecution, demonstrating its effectiveness in tackling financial crimes.

Since 2015, the IRS has seized over $10 billion in digital assets and proposed new regulations on brokers to reduce tax evasion. The CI’s recent actions reflect the IRS’s commitment to enforcing tax laws and regulations in the evolving world of digital currencies.

The CI Unit has formed significant partnerships, both domestically and internationally, to combat financial crimes. Notable operations include the Joint Criminal Opioid and Darknet Enforcement (JCODE) Task Force’s success in Operation SpecTor.

The IRS has leveraged advanced data analytics, querying Bank Secrecy Act (BSA) data in most investigations. The agency has also concentrated on training law enforcement partners worldwide in the latest investigative techniques. These efforts particularly emphasize blockchain analysis and combating the financing of terrorist organizations.

The report underscores the IRS’s adaptability and resourcefulness in addressing the challenges posed by financial crimes in the digital age. It highlights the agency’s continued efforts to stay ahead in an increasingly complex financial crime landscape.

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About The Author

Nik is an accomplished analyst and writer at Metaverse Post, specializing in delivering cutting-edge insights into the fast-paced world of technology, with a particular emphasis on AI/ML, XR, VR, on-chain analytics, and blockchain development. His articles engage and inform a diverse audience, helping them stay ahead of the technological curve. Possessing a Master’s degree in Economics and Management, Nik has a solid grasp of the nuances of the business world and its intersection with emergent technologies.

Nik Asti