Guy Ficco, the chief of IRS criminal investigation, stated that throughout tax reporting season, his organization has grown more proactive and equipped to handle tax crimes involving cryptocurrency.
As American residents approach the April 15 deadline for filing their taxes, the Internal Revenue Service of the United States says it is prepared for a sharp increase in cryptocurrency tax crime cases in the future.
At the Chainalysis Links event in New York, IRS criminal investigation chief Guy Ficco told CNBC that his agency was preparing for an increase in tax fraud and evasion cases that had coincided with it.
"This year and going forward, there will be a significant increase in charged Title 26 crypto cases."
Citizens who intentionally avoid paying taxes by falsifying or obscuring their reporting paperwork are subject to a Title 26 tax code.
According to Ficco, cryptocurrency was hitherto mostly used as a vehicle for financial crimes including money laundering, fraud, and frauds. However, he claimed that his organization has recently noticed a sharp increase in "pure crypto tax crimes" and anticipated even more in the near future.
"This could be as simple as not disclosing the revenue from cryptocurrency sales, and that's an area I predict an increase in," Ficco stated.
He said that in order to more effectively combat cryptocurrency crime, his organization has teamed up with multiple other law enforcement agencies including the blockchain analysis company Chainalysis.
"My IRS special agents are amazing at tracking down and locating money, but when it comes to some of the tools and applications required in the world of cryptocurrency, the professionals at Chainalysis come in," he stated.
In order to help people file their taxes correctly and avoid getting hit by the IRS, Ficco also provided a few fundamental guidelines.
"Having a base in the asset is the fundamental rule of thumb. The moment you sell an asset is when you have made your disposition, according to Ficco.
"You have to pay tax on the $10,000 gain you have if you buy something for $10,000 and sell it for $20,000."
According to Ficco, his organization has been more active in looking into and punishing American individuals who have intentionally obscured or misled on their tax returns, as well as those who have previously neglected to submit their cryptocurrency taxes.
Frank Richard Ahlgren III, a resident of Texas, was charged on February 6 by a federal grand jury with submitting fraudulent tax returns and evading reporting obligations on income exceeding $4 million in Bitcoin (BTC).
April 2024, Cryptoniteuae