According to a report from the Internal Revenue Service (IRS) criminal investigations division, tax evasion has emerged as a significant area of focus in crypto investigations. More than half of all probes conducted in the last fiscal year were related to tax matters.
This news coincides with the IRS actively seeking input from stakeholders on its upcoming framework centered around cryptocurrencies.
Crypto Tax Crimes Surged
The report indicates that three years ago, more than 90 of active cryptocurrency investigations primarily focused on money laundering. However, tax-related issues accounted for approximately half of the digital asset investigations in the previous fiscal year, which began October 1, 2022, and ended September 30, 2023.
Therefore, the IRS is intensifying its efforts to combat cryptocurrency tax fraud. The agency’s Criminal Investigation Unit reported an increase in the number of investigations into digital asset reporting in its annual report.
In the paper, the unit mentioned that they initiated at least 2,676 cases in the 2023 fiscal year. They identified over $37 billion in transactions associated with financial and tax crimes.
