The Internal Revenue Service (IRS) of the United States has revealed that the agency was cracking down on "dozens" of tax-avoidance cryptocurrency users. The IRS has partnered with tax agencies in four other countries to ensure that tax enforcement strategies are applied across the board.
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Tax agencies in 5 countries hunt dozens of tax evaders using digital currencies
According to the IRS, the tax agency puts a lot of effort into the fight against tax evasion that stems from the use of cryptocurrency. Ryan Korner, chief agent of the Los Angeles-based IRS Criminal Investigations Bureau, said during a phone call to the press that, when digital currency was popularized, the tax agency had difficulty dealing with suspected tax cheats. However, the IRS has gained "expertise" in the area of funds transfer. "We have tools that were not available six months or a year ago," Korner told reporters on Friday. The revelation comes after the IRS announcement in late July that 10,000 US residents with cryptocurrencies would receive warning letters from the US tax entity. Then, in October, the IRS unveiled a new tax form requiring tax filers to indicate whether or not they used a digital currency during the year. Some 150 million Americans file returns with the 1040 form that raises the question of virtual currency.
This week, the IRS announced the holding of a meeting with four other nation states so that they can partner to fight cross-border tax evasion related to users of digital currency. The group of five countries is called the Joint Chiefs of Global Tax Enforcement or J5. The J5 includes the Australian Criminal Intelligence Commission (ACIC) and the Australian Tax Office (ATO), the Canada Revenue Agency (CRA), the Dutch Tax Inlichtingen in Opsporingsdienst (FIOD), the British HM Revenue and Customs (HMRC) and the US Internal Revenue Service Criminal Investigation (IRS-CI). The group of J5 investigators told the press this week that activities related to cybercrime related crimes such as breaches of data privacy and ransomware are also used to commit tax evasion.
"Tax evasion is not a new crime, but the sophistication with which criminals commit tax frauds has increased dramatically through cybercrime-related activities in recent years," the J5 working group said in a statement. . "Data breaches, intrusions, takeovers and compromises are the new tools used by criminals to commit tax offenses."
A wave of tax audits
According to the latest report, after sending 10,000 letters to US taxpayers, the IRS now intends to launch a new wave of tax audits and criminal investigations. The tax agency warns that the effort is quite serious and that people avoiding paying their taxes via cryptocurrencies can be subject to tax evasion taxes and penalties on winnings to virtual investments. "These data do not go to the surface – we use this data," Korner said. The US tax agency recently released its first tax directive for digital currencies since 2014, which contains controversial tax obligations created by cryptocurrency ranges. The tax payable only applies if the forged property has been used by the owner and the person is spending or moving the parts. "If your cryptocurrency has gone through a difficult range, but you have not received any new cryptocurrency, either via an air leap (a cryptocurrency distribution at multiple general ledger addresses distributed taxpayers) or another type of transfer, you do not have taxable income. , "Reads the IRS orientation letter on cryptocurrency.
The UK has also followed the lead of the IRS by issuing guidelines on digital currency for businesses on November 1 st. British taxpayers who have already used cryptocurrency in the past have received new guidelines forwarded in late 2018. Reports published by Her Majesty's Revenue & Customs (HMRC) Explain how businesses and individuals residing in the United Kingdom should fulfill their tax obligations. The J5 task force that attacks "dozens" of crypto-currency users avoiding paying taxes is part of a global effort launched by the organization in June 2018.
"We will work together internationally to reduce the growing threat of cryptocurrency and cybercrime for tax administrations and to make the most of data and technology," said the J5 working group to the public. last year.
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