US Tax Agency Says Crypto Tax Investigations are Increasing
The CI Unit of the IRS has reported an increase in investigations related to the reporting of digital assets.
In their yearly report released on December 4, the investigative arm revealed that they launched over 2,676 cases and identified $37 billion in tax and financial crimes during the 2023 fiscal year.
The team noted that the use of digital assets has been on the rise, resulting in more tax investigations. According to the Criminal Investigation Unit, these investigations involve unreported income from capital gains on the sale of cryptocurrency, income from mining activities, or income received in the form of cryptocurrency (such as wages, rent, or gambling winnings).
They also observed cases of evasion of payment, where individuals fail to disclose their ownership of digital assets in an attempt to hide their holdings.
Since 2019, the IRS has required US taxpayers to report their digital asset transactions specifically, and this question has been included on tax forms each year since.