The Internal Revenue Service is focusing on cryptocurrency tax evasion with virtual currencies like Bitcoin and non-fungible tokens, employing data analytics to uncover transactions that crypto users assumed were hidden.
The IRS has been training its spotlight on crypto users, adding a question to the front page of the tax form asking taxpayers, “At any time during 2020, did you receive, sell, send, exchange, or otherwise acquire any financial interest in any virtual currency?” While technologies like crypto and NFTs are designed to be invisible, the IRS is aware that money laundering is being used by some crypto users, and it needs new skills in asset tracing, along with crypto expertise and digital asset auditing.
The IRS is leveraging data analytics technology and artificial intelligence to assist its overburdened staff, especially at a time when the IRS has been facing employee shortages and is stepping up its recruitment efforts. “This is not your grandfather’s IRS,” said IRS Commissioner Chuck Rettig during New York University’s online Tax Controversy Forum on Thursday. “This is an agency that has quite a bit of involvement with respect to data analytics.”
Read the full article
Accounting Today: IRS turns to data analytics to track crypto tax evasion