The Internal Revenue Service, a major US regulator, could seize it Cryptocurrencies Estimated to be billions of dollars in tax fraud and other crimes related to the coming year. That’s what an official from the key agency says.
IRS Criminal Investigation chief Jim Lee spoke of such a development after giving a press conference with media reporters. He said, “I expect the trend of crypto seizures to continue through fiscal year 2022.
Lee made such comments following the release of an annual IRS criminal investigation report on Thursday, November 18th. According to the report, the IRS seized $ 3.5 billion worth of crypto assets in fiscal year 2021, a number representing 93% of all assets seized by tax enforcement that year.
In 2020, the IRS Criminal Police seized $ 1.2 billion worth of crypto coins in connection with cases of criminal activity such as tax fraud, money laundering, wire transfer fraud and the distribution of illicit narcotics. That includes $ 1 billion stolen from the Silk Road; an online bitcoin exchange was closed in 2013. The unit also tracked a former Microsoft Corporation software developer who used crypto coins to hide $ 10 million stolen from the company earlier that year.
Recently, Congress gave the IRS more powers to oversee crypto transactions in the Infrastructure Act, which President Joe Biden signed on Monday, November 15, giving tax authorities more transparency in cryptocurrency trading.
The IRS could also benefit from an additional $ 80 billion in funding the Democrats support in Biden’s Build Back Better policy plan (a bill that aims to help Americans in many walks of life – education, subsidized childcare and health care, lower taxes) , suggest. who could get a vote in the house on Thursday next week. Lee stated that the money is badly needed in his unit to hire more than 250-300 specialty agents and invest in systems to identify and prosecute cybercrime.
What does the new infrastructure law mean for US crypto investors?
As Blockchain.News reported in August, the new infrastructure law could have a negative impact on the way consumers invest in cryptocurrencies like Bitcoin in the US
On Monday, November 15th, President Joe Biden signed the Infrastructure Investment and Job Act, popularly known as the Infrastructure Bill. The law allocates funds and other resources to public transportation, bridges, roads, water and sewer systems, power grids, ports, railways, cybersecurity and broadband internet, among others.
However, the law contains some new reporting requirements for cryptocurrency transactions that have little to do with infrastructure. This could have a significant impact on millions of U.S. consumers and businesses that have adopted cryptocurrencies for their accessibility, transparency, and efficiency.
The new law requires “crypto brokers” to notify the IRS directly of cryptocurrency transactions. The law also requires anyone in receipt of more than $ 10,000 in digital assets to report their personal information to the IRS within 15 days by completing Form 8300.
In the meantime, Patrick McHenry (R-North Carolina) and Tim Ryan (D-Ohio) US lawmakers tabled a bipartisan bill on Thursday, November 19, to amend a tax provision for cryptocurrencies in President Biden’s newly passed infrastructure law.
The bipartisan bill aims to clarify the definition of a “crypto broker” as set out in the Infrastructure Investment and Jobs Act.
Legislators and crypto advocates were different groups on how broad or narrowly to define the term and how companies falling into the crypto industry should report crypto transactions to the IRS.
The ambiguity of the current language in the new legislation has been a point of contention.
The Infrastructure Act defines a broker as “any person who is responsible for the regular provision of services related to the transfer of digital assets on behalf of another person”.
However, this means that even software developers and crypto miners are subject to reporting customer information, even if they have no way of collecting this data.
In turn, the new law will present many crypto investors who use their own crypto wallets for daily transactions and trading with tax reporting challenges.
Hence, crypto investors need to stay on the right side of the new law regarding their investments. They should track their cost base (what they are being paid for their cryptocurrencies) as closely as possible to align with the crypto exchanges that are reported to the IRS. You also need to find an experienced crypto tax professional to assist you in accurately reporting your crypto investments.
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