The Internal Revenue Service (IRS) has warned of an increase in the number of cases of tax evaders using cryptocurrencies, as the deadline for filing tax returns (April 15) has come to an end.
Speaking at the Chainalysis Links event in New York, Guy Ficco, head of the IRS Criminal Investigation Division, said that the agency expects a surge in tax fraud with cryptocurrencies. Ficco cautioned that cryptocurrency traders are subject to Section 26 of the Tax Code on intentional tax evasion, when the tax return applicant lies or deliberately introduces confusion in their reporting documents.
According to Ficco, previously cryptocurrencies were mainly used to commit financial crimes and money laundering, and now they have become more often involved in tax fraud. This may simply be the lack of reporting on income received from sales of crypto assets, the IRS official clarified. He noted that for a more effective fight against cybercrime, the agency cooperates with the analytical company Chainalysis and law enforcement agencies. Fikko explained how to file a tax return correctly and not get hit by the IRS:
"If you bought something for $10,000 and sold it for $20,000, then your profit was $10,000. This is exactly what you need to pay tax on. We will increase the prosecution of US citizens who either did not report their cryptocurrency taxes or provided incorrect information when filing their tax return," Ficco said.
Speaking at the Chainalysis Links event in New York, Guy Ficco, head of the IRS Criminal Investigation Division, said that the agency expects a surge in tax fraud with cryptocurrencies. Ficco cautioned that cryptocurrency traders are subject to Section 26 of the Tax Code on intentional tax evasion, when the tax return applicant lies or deliberately introduces confusion in their reporting documents.
According to Ficco, previously cryptocurrencies were mainly used to commit financial crimes and money laundering, and now they have become more often involved in tax fraud. This may simply be the lack of reporting on income received from sales of crypto assets, the IRS official clarified. He noted that for a more effective fight against cybercrime, the agency cooperates with the analytical company Chainalysis and law enforcement agencies. Fikko explained how to file a tax return correctly and not get hit by the IRS:
"If you bought something for $10,000 and sold it for $20,000, then your profit was $10,000. This is exactly what you need to pay tax on. We will increase the prosecution of US citizens who either did not report their cryptocurrency taxes or provided incorrect information when filing their tax return," Ficco said.
