The US Internal Revenue Service (IRS) has launched a program to identify cryptocurrency owners who are hiding their income. For this, IRS employees will be trained in blockchain analysis.
IRS Anti-Fraud Director Damon Rowe said the IRS will work to identify unreported sources of income as part of the Operation Hidden Treasure program. The main priority of the program is to detect cryptocurrency users who hide their income.
Operation Hidden Treasure is a joint program of the Anti-Fraud Department and its Criminal Investigation Unit. The IRS will train agents in blockchain analysis to root out tax evasion among cryptocurrency users. As part of the initiative, IRS staff will also work with Europol.
Carolyn Schenck, National Fraud Advisor at the Office of General Counsel for the IRS, said the agency is working with private contractors and suppliers, as well as blockchain analytics firms, to identify clear signs of tax fraud.
These characteristics include analyzing user activity, who structure transactions just below reporting requirements, use shell companies to hide revenue, and “transact within and outside the network,” Schenk said.
The IRS recently stated that investors are not required to report purchases of cryptoassets with fiat currencies until the cryptocurrencies are sold or exchanged. However, cashing out cryptocurrencies or making daily purchases are generally considered taxable events.
Operation Hidden Treasure aims to find, track, and correlate such transactions with taxpayers, Schenck said.
“These transactions are not anonymous,” she said. “We see you.”
Recall that last fall, the IRS sent out letters for the second time warning about the need to provide full information about the profit from operations with cryptoassets.
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