Friday, February 9, 2018

IRS CI Focuses on Crytpocurrencies and Related Tax Evasion Schemes (2/9/18)

David Voreacos, IRS Cops Are Scouring Crypto Accounts to Build Tax Evasion Cases (Bloomberg 2/8/18), here.  Excerpts:
The U.S. Internal Revenue Service *  * * has assigned elite criminal agents to investigate whether Bitcoin and other cryptocurrencies are being used to cheat the taxman. 
A new team of 10 investigators is focusing on international crimes. In addition to following undeclared assets that are flowing out of Swiss banks after a crackdown, it will also build cases against tax evaders who use cryptocurrency. The promise of anonymity that has drawn money launderers and drug dealers to virtual coins is also attracting tax cheats, the IRS has said. 
* * * * 
“It’s possible to use Bitcoin and other cryptocurrencies in the same fashion as foreign bank accounts to facilitate tax evasion,” Fort [CI Chief] said. 
* * * * 
Fort said his unit is focusing on how users convert cash to cryptocurrency and back. “We know that you want to get your money out at some point,” he said. 
In addition to individuals who evade taxes, Fort’s agents are looking at unlicensed exchanges in the U.S. and overseas. They are working with other criminal agents around the U.S. and stationed abroad. 
The Criminal Investigation Division gained expertise in tracking cryptocurrency by working on hundreds of identity-theft cases. The division has shrunk in recent years as Congress has reduced funding, resulting in a loss of 21 percent of agents since 2011.\ 
As a result, the division is forming specialized teams with expertise to develop high-impact cases. Aside from cryptocurrency and the flow of funds out of Switzerland, the international team will focus on tax crimes involving expatriates and cases arising out of the Foreign Account Tax Compliance Act.

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