The Tax Times: IRS CI Identifies Dozens of Cryptocurrency Tax Evaders at J5!

Wednesday, November 13, 2019

IRS CI Identifies Dozens of Cryptocurrency Tax Evaders at J5!

The IRS’s criminal division identified “dozens” of potential cryptocurrency tax evaders or cybercriminals after a meeting this week with tax authorities from four other countries.

Leaders of tax enforcement authorities from the U.S., Australia, Canada, the Netherlands and the United Kingdom, known as the J5, met this week to discuss ways to deal with tax crimes and tax evasion, particularly involving cryptocurrency and shared data, tools and tax enforcement strategies to find new leads in a quest to mitigate cross-border money-laundering and cybercrime.

“All of the participants from the J5 countries rolled up their sleeves and worked together using real data to identify real criminals. One thing was really clear this week and that’s the J5 countries are committed to identifying and holding accountable tax cheats and other criminals who attempt to use the dark web and cryptocurrency as an underground economy.”

All of this occurred while the IRS is preparing for a new wave of cryptocurrency audits. The agency sent letters to more than 10,000 people earlier this year, warning that they might be subject to penalties for skirting taxes on their virtual investments.

The IRS And Its Partners Are Using Data From Previous Enforcement Activities To Find New Criminals, Korner Said.

Using The Data From The Five Countries Gives Them A Broader View Of How Accounts, Money And People Are Connected.

The IRS released guidance last month telling virtual currency investors and their tax advisers how the agency expects them to report income from their holdings. The guidance is the first since 2014 and comes as tax auditors are increasingly focusing on examining individuals with cryptocurrency investments.

“Being able to come together and share expertise, which hasn’t been done before, we can develop new platforms that we can each take back to our respective countries, importing the data that we each have to be able to data map, utilizing these new tools and develop new leads that we previously would not have known about prior to this challenge,” said Brooke Tetzlaff, a supervisory special agent at the IRS Criminal Investigation division and a U.S. participant in the Challenge.

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