The Internal Revenue Service (IRS) has ramped up its efforts to monitor cryptocurrency transactions, reflecting a growing concern over tax compliance in the digital asset space. Since 2017, the agency has shifted from targeting individual traders to implementing extensive data requests from major cryptocurrency exchanges. The publication provides the following information:
IRS's Enhanced Surveillance Capabilities
The IRS's enhanced surveillance capabilities have led to significant outcomes, including the seizure of $3.5 billion in cryptocurrencies during the fiscal year 2021. This aggressive approach is part of a broader strategy to identify and address tax noncompliance among crypto users across various platforms.
Recent Actions by the IRS
As of June 2023, the IRS has initiated 216 examinations related to cryptocurrency transactions and has sent nearly 15,000 soft letters to users flagged through exchange data. These letters serve as warnings to taxpayers who may not have reported their crypto earnings, emphasizing the agency's commitment to enforcing tax laws in the rapidly evolving digital currency landscape.
Currently, the UK’s HM Treasury is focusing on enhancing money laundering regulations, particularly for cryptocurrency businesses. For more details on the proposed changes and their implications, see the full report here.
