Markets News Report
December 05, 2023

IRS Ramps Up Crypto Tax Investigations as Financial Crimes Surge

In Brief

IRS’s Criminal Investigation Unit reported a increase in Crypto Tax investigations, uncovering more than $37 billion in fiscal year 2023.

IRS Reports Increased Crypto Tax Investigations Amid Rising Financial Crimes

The US Internal Revenue Service’s (IRS) Criminal Investigation (CI) Unit has noted a marked increase in investigations related to digital asset reporting in the fiscal year 2023.

The IRS’s CI Unit reported initiating over 2,676 cases, uncovering more than $37 billion related to tax and financial crimes. The increase in cases is partly attributed to the rise in the usage of digital assets, leading to more tax investigations.

The CI Unit’s annual report highlighted the complexity of investigating unreported income from cryptocurrency transactions. These include capital gains from cryptocurrency sales, income from mining, and cryptocurrency received as wages or other income types.

IRS Enhanced Focus on Money Laundering and Cybercrimes

The IRS has expanded its focus to include tax fraud, money laundering and cybercrimes. In fiscal year 2023, the CI obtained an 88.4% conviction rate in cases accepted for prosecution, demonstrating its effectiveness in tackling financial crimes.

Since 2015, the IRS has seized over $10 billion in digital assets and proposed new regulations on brokers to reduce tax evasion. The CI’s recent actions reflect the IRS’s commitment to enforcing tax laws and regulations in the evolving world of digital currencies.

The CI Unit has formed significant partnerships, both domestically and internationally, to combat financial crimes. Notable operations include the Joint Criminal Opioid and Darknet Enforcement (JCODE) Task Force’s success in Operation SpecTor.

The IRS has leveraged advanced data analytics, querying Bank Secrecy Act (BSA) data in most investigations. The agency has also concentrated on training law enforcement partners worldwide in the latest investigative techniques. These efforts particularly emphasize blockchain analysis and combating the financing of terrorist organizations.

The report underscores the IRS’s adaptability and resourcefulness in addressing the challenges posed by financial crimes in the digital age. It highlights the agency’s continued efforts to stay ahead in an increasingly complex financial crime landscape.

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About The Author

Nik is an accomplished analyst and writer at Metaverse Post, specializing in delivering cutting-edge insights into the fast-paced world of technology, with a particular emphasis on AI/ML, XR, VR, on-chain analytics, and blockchain development. His articles engage and inform a diverse audience, helping them stay ahead of the technological curve. Possessing a Master's degree in Economics and Management, Nik has a solid grasp of the nuances of the business world and its intersection with emergent technologies.

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Nik Asti
Nik Asti

Nik is an accomplished analyst and writer at Metaverse Post, specializing in delivering cutting-edge insights into the fast-paced world of technology, with a particular emphasis on AI/ML, XR, VR, on-chain analytics, and blockchain development. His articles engage and inform a diverse audience, helping them stay ahead of the technological curve. Possessing a Master's degree in Economics and Management, Nik has a solid grasp of the nuances of the business world and its intersection with emergent technologies.

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