With the increased use of cryptocurrency, the IRS launched an operation aimed at taxpayers attempting to conceal their cryptocurrency income. The popularity of cryptocurrencies is at its highest point, and the authorities are keeping an eagle eye on the digital asset market.
Authorities are trying to regulate digital assets and find possible ways to tax them. Operation Hidden Treasure is aimed at investors who are not disclosing their crypto income and concealing themselves from reporting their crypto revenue.
IRS will bust crypto tax evaders
The details of the report by the Internal Revenue Service (IRS) were reported in a press release by the Tax Law Offices of David W. Klasing on June 16.
To meet the initiative’s goals, the IRS has formed a task force comprised of experts in tracking various types of crypto income, as well as combining the civil and criminal divisions of the IRS to combat crypto tax fraud.
The press release states that one of the common ways that investors adopt to evade tax is by doing recurring transactions of less than $10,000. Some other investors utilize shell corporations that assist in hiding the identity of the owner of the company. This enables the investor to carry out multiple activities by undisclosing the identity and party.
Operation Hidden Treasure is also looking into cloaking blockchain technology that allows some exchanges to provide trading facilities for users without revealing their identities.
“Whether the unreported income was intentional, or a mistake is difficult to prove and the larger the amount of unreported income the less likely the IRS will be to believe your noncompliance was non willful or unintentional.”
The operation will also look into and track unreported crypto income carried out through anonymous transactions. IRS is now keeping a keen eye on cryptocurrency as investors believe that they can stay anonymous using the technology.