Cryptocurrency, News & Updates

IRS Spends Money on Analytics Tools for Crypto

September 10, 2020

The United States Internal Revenue Service’s (IRS) eye on cryptocurrency has grown over the last couple years. The US Internal Revenue Service’s focus on cryptocurrency has been increasing for the past couple of years. The government agency has recently been spending money on cryptocurrency tracing tools and calling out for additional ones.

Recent reports showed that the IRS had dropped almost $250,000 for a contract with a new firm, Blockchain Analytics and Tax Services LLC. Beginning yesterday, the contract’s details are still thin on the extent of the arrangement,, which makes the federal contract details public, and noting that it is for a 12-month subscription for 120 users.

As recently stated, the firm’s only previous contract with the United States government is a $9,800 fee from the United States Treasury for serving as an expert witness.

In the past week, the IRS’s Criminal Investigations unit has put out a new call for firms that develop tracing tools for privacy-centric coins like Monero, as well as Layer 2 transaction protocols like Bitcoin’s Lightning Network. It’s a full version of a similar request that the IRS issued back in July.

It was discovered that Coinbase was set to secure contracts with both the IRS and Drug Enforcement Administration (DEA) for access to its Coinbase Analytics tracking tools. A majority of the crypto community was not ecstatic about the news.

Moreover, in August, the US Department of Justice proclaimed that it had detained millions of dollars’ worth of Bitcoin from terrorist groups—movements that the IRS’ Criminal Investigations group assisted.

The agency’s crypto-centric actions are not only happening behind the scenes. Lately, the IRS released the draft 2020 form for individual tax returns, they revealed that the general question about interactions with cryptocurrency – “At any time during 2020, did you receive, sell, send, exchange, or otherwise acquire any financial interest in any virtual currency?”— will be moved to the first page of the return. Formerly, it was discovered on a later page that not all users would even need to fill out or compromise.

Succeeding that news, it was also publicized that the IRS had sent out another round of letters to US citizens not to pay taxes to their cryptocurrency transactions. The agency formerly did the same in 2019, carrying out more than 10,000 messages.

Leave a Comment

Leave a Reply