The Internal Revenue Service (IRS) is building “hundreds” of crypto cases to crack down on tax evasion, an official said. In fiscal year 2022, the IRS Criminal Investigation Division seized approximately $7 billion in cryptocurrencies, double the previous year’s total.
IRS builds ‘hundreds’ of cases to tackle tax evasion through crypto
The Internal Revenue Service (IRS) (CI) Criminal Investigation Division, the tax agency’s law enforcement arm, is building “hundreds” of crypto cases, Bloomberg reported on Thursday. The publication cited CI director Jim Lee, who said more cases would soon be made public.
Lee explained in a press call that the cases mainly involved crypto being exchanged for fiat currency and people not reporting crypto payments. The CI director noted that while most cases involved money laundering in the past, he has “really seen a shift” in digital asset investigations over the past three years.
The Criminal Investigation Division’s annual report, released on Thursday, claims that the IRS “seized record amounts of data and cryptocurrency.” Lee told the news outlet that CI seized about $7 billion in cryptocurrencies in fiscal year 2022, double the total amount of the previous fiscal year. CI’s financial year begins on October 1, 2021 and ends on September 30, 2022.
The tax agency established the Office of Forensic and Cyber Services (CFS) last year to unify several areas of investigation, including digital assets, cybercrime, digital forensics, and forensics. physics. Lee claims that the office is capable of tracing essentially any cryptocurrency transaction.
Among its priorities, CFS supports agency-wide criminal investigations into the illegal use of digital assets and how they can be used to exploit the US tax and financial system.
“CFS is constantly taking additional steps to grow, especially as threats develop in areas like decentralized finance [defi], peer-to-peer payments, and crypto-anonymity enhancement. . Due to relatively limited resources, CFS focuses on the cases where they can have the most significant impact,” the report adds, detailing:
CI has prioritized training and implementation of cryptocurrency, blockchain, and open-source intelligence technologies to unravel complex cyber-financial crime plots.
“When a corrupt government official abroad accepts a bribe, they often use a third party to transfer or launder those illicit proceeds to purchase property, cryptocurrencies, and more. If any funds move into or through the US [financial system], CI can track that amount,” the report further details.