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HomeNewsIRS and Chainalysis Join Forces to Monitor and Tax Bitcoin, Ethereum, and...

IRS and Chainalysis Join Forces to Monitor and Tax Bitcoin, Ethereum, and Litecoin in US Wallets

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  • IRS collaborates with Chainalysis and other agencies to enhance tracking and prosecution of crypto transactions.
  • Taxpayers advised to accurately report crypto gains; failure to do so can lead to aggressive IRS actions.

The Internal Revenue Service (IRS) is preparing for an increase in cases involving cryptocurrency-related tax evasion.

Guy Ficco, head of the IRS Criminal Investigation Division, discussed the agency’s readiness to tackle tax fraud associated with, highlighting the shift towards direct tax violations such as unreported income from cryptocurrency transactions.

In an interview, Ficco emphasized the growing problem of tax evasion in the realm of digital currencies. He noted that, traditionally, crypto have been linked to financial crimes like fraud and money laundering.

Recently, however, there has been a notable rise in cases purely involving tax violations with crypto, including the incorrect reporting of income and misstatements of asset cost bases.

Read more: Germany’s LBBW Bank, Valued at $355 Billion, Ventures into Bitcoin, Ethereum, XRP, and Crypto Custody

To combat these challenges, the IRS has partnered with blockchain analytics firm Chainalysis and other law enforcement agencies.

This collaboration aims to enhance the IRS’s ability to track and analyze cryptocurrency transactions effectively, using advanced technological tools necessary for investigating the complex and often opaque nature of digital currency transactions.

Ficco also provided guidance on proper tax reporting for cryptocurrency transactions. He explained that taxpayers are required to report any gains realized from their transactions. For instance, if someone buys a cryptocurrency asset for $10,000 and sells it for $20,000, they must report a gain of $10,000.

Related: Uniswap Responds to SEC Pressure: Trading Fees Hiked to 0.25%

Furthermore, the IRS has intensified its efforts in prosecuting individuals who have either neglected to report their cryptocurrency finances or have knowingly provided false information on their tax returns. 

This includes cases like the recent indictment of a Texas resident accused of omitting over $4 million in Bitcoin gains from his tax filings, emphasizing the agency’s commitment to enforcing tax laws amidst the evolving digital financial landscape.

https://youtu.be/BWt3BfUzaMU

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Isai Alexei
Isai Alexei
As a content creator, Isai Alexei holds a degree in Marketing, providing a solid foundation for the exploration of technology and finance. Isai's journey into the crypto space began during academic years, where the transformative potential of blockchain technology was initially grasped. Intrigued, Isai delved deeper, ultimately making the inaugural cryptocurrency investment in Bitcoin. Witnessing the evolution of the crypto landscape has been both exciting and educational. Ethereum, with its smart contract capabilities, stands out as Isai's favorite, reflecting a genuine enthusiasm for cutting-edge web3 technologies. Business Email: info@ethnews.com Phone: +49 160 92211628
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