IRS criminal investigation chief prepares for rise in crypto tax evasion

The United States Internal Revenue Service (IRS) criminal investigation chief Guy Ficco has said that the agency is ready to tackle the rise in tax evasion and fraud. With the deadline approaching for United States residents to file their taxes on April 15, the body said it will be ready to tackle that menace. The IRS investigation chief made this statement to CNBC at the recent Chainalysis Links event in New York.

IRS criminal investigation chief discusses crypto tax evasion

The IRS criminal investigation Chief noted that he expects an increase in Title 26 crypto cases this year and beyond. A Title 26 tax code is used to describe the situation where residents either refuse to file their taxes or willfully modify their documents. Ficco also mentioned that there have been several cases where crypto has been used as a vehicle to carry out different crimes, including money laundering, fraud, and scams.

The statement comes after a reminder posted on the official IRS website. The agency reminded residents of the need to pay taxes if they have made any transactions using crypto, including selling, using it as a payment method, and other forms of transactions. The agency also gave tips on how to report taxes on its website but the report notes that it has not helped reduce tax evasion offenses.

Collaboration with firms to combat crypto crimes

The IRS boss explained that his team has been noticing a sharp rise in pure crypto crimes and they project that it will rise even further in the future. He mentioned that some of the crimes might not be tied to actually reporting income made from selling crypto but to hide the source of the digital asset. In this regard, he noted that the agency’s partnership with analysis firm Chainalysis and other enforcement agencies will help it crack down on these crimes.

Guy Ficco applauded the work of his special agents in tracing and following these funds. However, he notes that they need several tools to achieve their aims, and that is where Chainalysis comes in. A recent report by Divly in 2023 notes that only 1.62% of investors paid crypto taxes. Ficco’s predecessor Jim Lee also focused on tax issues last year. The former IRS chief highlighted that about half of the tax issues in 2023 were related to crypto investigations.