IRS is Developing 'Hundreds' of Crypto Cases Amid Upcoming Tax Season
According to a report from Bloomberg Law, Division Chief Jim said the United States Internal Revenue Service (IRS) criminal investigation division is developing hundreds of cases involving crypto, and many of the cases are to be made public soon.
The cases are part of the IRS ramping up a plan for the upcoming tax season. In addition, the cases entail sectors around “off-ramping” transactions – a situation where digital assets are exchanged for fiat currency, as well as individuals receiving crypto as payment and not reporting.
This report comes after United States District Judge Paul G. Gardephe granted the IRS permission to issue ‘’John Doe’’ summons on M.Y. Safra Bank to release information about customers who may have failed to remit taxes received from conducting crypto transactions.
IRS Commissioner Charles P. Rettig stated, "The government's ability to obtain third-party information about individuals who have failed to report their digital asset income remains an important tool for tax evasion.” Charles added that the John Doe summons is a step in the right direction toward ensuring that everyone pays their taxes according to what they earn.
Precisely, Gardephe asked SFOX, a complete crypto dealer that provides crypto services for institutional investors, to produce information about its customers who use M.Y. Safra Bank to make cryptocurrency payments.
The IRS recently created a new category dubbed “Digital Assets” for the different categorizations of assets that are tied to the emerging blockchain industry. The regulator defined Digital Assets as any representations of value that are recorded on a cryptographically secure distributed ledger or any similar technology.
Per the draft bill, investors in the US will be able to see if and how they are supposed to report their digital assets, which include crypto coins and Non-Fungible Tokens (NFTs).
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