The Internal Revenue Services (IRS) is in midst of tax season, typically a time of anxiety for most taxpayers as they scramble to package the litany of documents demanded by the IRS to complete federal taxes. Over the years, the IRS has issued multiple statements on tax reporting for crypto or digital assets. The message has been fairly clear – don’t under-report gains from crypto investments – or else.
Yesterday, according to a report in Forbes, the IRS has revved up a new initiative crafted to uncover anyone attempting to cover their tracks of crypto trading profits. Dubbed Operation Hidden Treasure, the effort is said to be a fraud enforcement priority.
According to the report, Damon Rowe, IRS Director of the Office of Fraud Enforcement, said they have created a dedicated team of investigation professionals trained in crypto and virtual asset tracking.
Additionally, the IRS is said to be attempting to “get ahead of the game” looking for evidence of tax evasion.
While the early days of crypto trading may have created ample opportunity to hide trading profits, today the story is quite different as blockchain transactions are public and crypto exchanges are required to track trades. This, along with a growing group of firms that provide automated crypto intelligence applications, means the IRS should have all the tools necessary to track down and tax scofflaws.