Crypto Mining News, Cryptocurrency, Don't Miss, Economy, Hot News, News & Updates

IRS’ Operation Hidden Treasure Risks

IRS is now ‘Raising the Stakes’ on crypto with Operation Hidden Treasure.

Crypto tax experts are saying that the IRS’ new anti-fraud initiative is a step-up from an average audit.

The Internal Revenue Service (IRS) is launching a new anti-tax fraud initiative named Operation Hidden Treasure. It is a joint effort from the IRS’ Fraud Enforcement Office and its Criminal Division, the task force will dig up unreported crypto transactions and hold tax evaders accountable.

Roger Brown, the head of tax and regulatory affairs at the crypto data company Lukka, stated that Operation Hidden Treasure is the IRS’s way of “raising the stakes” when it comes to enforcement.

Because the effort is being handled with the criminal division, Brown said, it is going to be looking particularly at intentional concealment, rather than the kinds of underreporting that could be categorized as civil tax fraud.

“Because it is the Office of fraud and fraud enforcement, and the criminal tax division is doing this and not the normal civil people, they’re looking for evidence of concealment, evidence of intent to not pay what’s owed,” he claimed.

Brown mentioned money transfers on the dark web, and also the “mixers” and tumbling services that might intentionally obscure transactions as potential examples of the kind of behaviors that the IRS could target in their investigations.

Crypto payments seem to be pretty private because they are pseudonymous, but they are also transparent: everything is publicly recorded on a distributed ledger, which makes every transaction easy to trace. Coin mixers are services that scramble the digital paper trail and are preferred by criminals looking to launder money on blockchains.

“cryptocurrency is the worst asset class to evade taxes on because there’s a permanent record of your transactions in the blockchain, unlike cash.”

Shehan Chandrasekara, head of tax strategy at the crypto accounting firm Cointracker

Chandrasekara also stated that tax fraud has no statute of limitations, Operation Hidden Treasure could uncover old transactions as well; “there is a lot of tax revenue to gain from this space for the IRS,” he added.

Brown highlighted that the idea is to go after the traders who particularly decide not to report their gains.

“If you just omitted an airdrop from the prior year, but you did other reporting, that’s not the kind of thing that’s going to raise fraud issues,” he said.

Stepping up the effort meant stepping up the consequences as well. Brown said:

“Penalties and other consequences can be severe.”

To get the latest Cryptocurrency, Blockchain, and Crypto-mining news, please join our Telegram Channel (Note: You may be prompted to install the Telegram App on your Mobile Phone, PC, or Mac – No worries, it’s safe)

Leave a Comment

Leave a Reply