IRS Announces Pilot Program to Combat Crypto-Related Tax Fraud Across Four Countries

According to reports, the US Internal Revenue Service (IRS) has announced a new pilot program starting this summer and will dispatch four commissioners to Australia, Singapore, Colombia, and Germany to combat international financial and tax criminal activities related to cryptocurrency, decentralized finance, and mixed money laundering transaction services. The program will last for 120 days from June 2023 to September 2023. （TechCrunch）

IRS: four commissioners will be sent to Singapore, Australia, Colombia and Germany to fight against DeFi and cryptocurrency international financial crime

As cryptocurrency transactions become more prevalent around the world, so do the challenges that arise for governing institutions like the US Internal Revenue Service (IRS) to enforce tax reporting and payment. In response to the increasing threat of financial and tax criminal activities related to cryptocurrency, decentralized finance, and mixed money laundering transaction services, the IRS has announced a new pilot program starting this summer.

Table of Contents

1. Introduction
2. What is the new program?
3. Why is the program being implemented?
4. Which countries will the IRS dispatch commissioners to?
5. How long will the program last?
6. What are the potential benefits and drawbacks of the program?
7. Conclusion
8. FAQs

What is the new program?

The IRS’s new pilot program will dispatch four commissioners to Australia, Singapore, Colombia, and Germany to collaborate with local authorities in curbing cross-border tax evasion and fraud. The aim is to tackle the use of cryptocurrency and its related financial and tax criminal activities by developing ways to identify and pursue crypto-related tax fraud and money laundering schemes.
The new program will look into the use of the blockchain technology and other crypto-related tools to provide seamless and swift global information sharing platforms that will aid in the detection of all kinds of irregular financial activities.

Why is the program being implemented?

Cryptocurrency is becoming an increasingly popular choice for tax evaders due to its relative anonymity and the fact that it is a decentralized currency, making it harder for governments to monitor. With the sudden rise of popularity in cryptocurrency, the IRS is undoubtedly facing novel challenges in enforcing tax payment and reporting policies through these channels.
To help strengthen the US government’s ability to enforce tax law in this new era of crypto, the new program will focus on developing proactive methods to detect and stop potential illegal activities.

Which countries will the IRS dispatch commissioners to?

The IRS will dispatch commissioners to Australia, Singapore, Colombia, and Germany. These countries have been selected as they are all major players in the cryptocurrency market and play host to many crypto-related companies, startups, and foundations.

How long will the program last?

The program will last for 120 days from June 2023 to September 2023. During this time, the IRS commissioners will share their expertise and knowledge on the US crypto taxation system with local authorities, as well as learn from their host countries about their own tax policies and enforcement methods.

What are the potential benefits and drawbacks of the program?

The primary benefit of this program is that it will enable the IRS to collaborate with foreign authorities and gather information from these companies, startups, and foundations to create a more concise global approach to combating financial and tax-related crimes related to cryptocurrency.
However, it is also possible that this program could create tensions between the US and the countries that the commissioners are set to visit. Moreover, while the development of new methods to detect and stop potential illegal activities is essential, it remains unclear if this program will have a lasting impact on the overall issue of tax evasion and fraud.

Conclusion

The IRS’s new program will undoubtedly help in preventing illegal financial activities related to cryptocurrency by sharing information with relevant foreign authorities. However, there are still many unknowns, such as the potential impact of this program on the US relationship with the countries of Australia, Singapore, Colombia, and Germany.

FAQs

Q: Will the IRS be taking any action against individuals who have already engaged in illegal activities related to cryptocurrency?
A: Yes, the IRS will be conducting investigations and audits to ensure that individuals who partake in illegal activities related to cryptocurrency are held accountable.
Q: What kind of information will the IRS commissioners share with foreign authorities?
A: The IRS commissioners will share information about the US cryptocurrency taxation system as well as learn from their host countries about their tax policies and enforcement methods.
Q: Is this program permanent?
A: No, the program will only last 120 days from June 2023 to September 2023.