IRS to Start ‘Operation Hidden Treasure’ - Crypto Income
I hope you have managed to stay safe and well! We focus on resolving tax issues in Prince William County and throughout the lower Northern Virginia area.
The IRS has now turned part of its focus onto the cryptocurrency market, in an attempt to capture tax revenue from unreported transactions. ‘Operation Hidden Treasure’ in a bid to Root Out Unreported Crypto Income, and bring American Investors currently operating in the arena under the tax umbrella of the U.S. Government.
Director of the Office of Fraud Enforcement Damon Rowe has let it be known that cryptocurrency fraud will be a priority (First reported in Forbes). The national fraud counsel for the IRS stated, “These transactions are not anonymous”. “We see you.”
FYI, cashing out crypto or making every-day purchases with it, is typically seen as a taxable event. While, simply buying crypto currency with real currency is not normally seen as taxable
Apparently, the agency is working with private contractors and vendors, presumably blockchain analytics firms, to develop “signatures,” or telltale signs of fraudulent activity. These indicators include looking at individuals who are “structuring” transactions just below reporting requirements (like sending a series of $10,000 transactions), or using shell corporations to hide funds.
Just in case you’re unaware, it is considered fraud, hence illegal, to try and distort receipts by you, by seeking to lower the amounts of each receipt to yourself for goods, services, or transactions, or deposits to a financial institution. Which is the definition of structuring, as defined by the criminal investigation IRS.
Bottom line the age old concept still applies. Anything that puts you in a better financial position than you had been prior to whatever happened, is probably taxable to you. Before the end of the summer, the IRS is expected to really begin pursue outstanding tax debts. Stay tuned for more info.