Home
News
IRS criminal investigation chief “Guy Ficco” stated on April 12th that taxpayers are committing more tax crimes related to cryptocurrencies.
Guy Ficco mentioned that the IRS has witnessed a rise in “pure crypto tax crimes” that fall under Title 26 of the United States Code, which refers to federal income tax violations. Pure tax crimes include not reporting income from cryptocurrency sales and hiding or protecting one’s actual basis in cryptocurrency.
IRS’ Ficco Observed an Increase in Tax Crimes Surrounding Crypto
Ficco believes that this issue will continue to persist. He has observed an increment in tax-reporting crimes and anticipates that the IRS will press more charges in the future. Until recently, IRS investigations have mostly been a part of more extensive investigations into cryptocurrency crimes. The IRS chief said that his agency has become more aggressive and proficient in dealing with cryptocurrency-related tax crimes.
As the deadline for filing taxes on April 15th approached, IRS criminal investigation chief Guy Ficco spoke with CNBC at the Chainalysis Links event in New York. He said the IRS is preparing for a significant increase in crypto tax crime cases.
Ficco explained that cryptocurrency was often used to commit financial crimes like scams and money laundering in the past. Nevertheless, he said that his agency has recently witnessed a significant increase in “pure crypto tax crimes,” and expects even more in the future. Ficco noted that his agency is prepared for increased cryptocurrency tax crime.
The IRS is Prepared, Said Ficco
According to Ficco, these crimes involve not reporting income generated from cryptocurrency sales or hiding the factual basis of cryptocurrency. Ficco said that his agency is getting ready to deal with an uptick in cases of tax fraud and evasion.
Ficco expects a lot more charged Title 26 crypto cases this year. The term “Title 26 tax code” pertains to individuals who intentionally avoid paying taxes by providing false information or confusing reporting documents.
He mentioned that his agency has collaborated with blockchain analysis firm Chainalysis and several other law enforcement agencies. Collaboration has been done to crack down on cryptocurrency crime better.
A General Rule for Capital Gains Tax
Guy Fico explained that a general rule is for an individual to have a basis in the asset. When the individual sells that asset, the point at which they sold it is considered a disposition. “If you buy something for $10,000 and sell it for $20,000, you have a $10,000 gain that’s subject to tax,” said Fico.
Ficco said that his agency has become more aggressive when investigating and prosecuting US citizens who have either failed to report their cryptocurrency taxes in the past or actively obfuscated or lied on their tax returns.
Summary
The IRS has noticed an increase in cryptocurrency-related tax crimes involving not reporting income from crypto sales and hiding one’s basis in crypto. Cryptocurrency was previously used for scams and money laundering, as stated by Ficco. The general rule is to have a basis in the asset and pay taxes on the gain upon selling it.
Disclaimer
The views and opinions stated by the author, or any people named in this article, are for informational purposes only. They do not establish financial, investment, or other advice. Investing in or trading in stocks, s or related indexes comes with a risk of financial loss.
Amanda Shinoy is one of the few women in the space invested knee-deep in crypto. An advocate for increasing the presence of women in crypto, she is known for her accurate technical analysis and price prediction of cryptocurrencies. Readers are often waiting for her opinion about the next rally. She is a finance expert with an MBA in finance. Quitting a corporate job at a leading financial institution, she now engages herself full-time into financial education for the general public.
