IRS will keep track of cryptocurrency tax evaders

The United States Internal Revenue Service (IRS) plans to develop more sophisticated ways to track traders who evade paying taxes on cryptocurrency earnings.

The United States Internal Revenue Service (IRS) plans to develop more sophisticated ways to track traders who evade paying taxes on cryptocurrency earnings.

IRS’s cybercrime program manager, James Daniels, published a presentation that offers various ways to get information about taxpayers and analyze it in order to determine if a person is related to cryptocurrency.

It is reported that the IRS will track the download of applications for trading cryptocurrencies on smartphones and computers of taxpayers. Also in the presentation it is proposed to obtain court permission to analyze transactions from bank accounts, credit cards and PayPal accounts.

Another way is to view the blocks in the blockchain and track transactions belonging to different users.

“After we determine the address of the cryptocurrency wallet, we will be able to view the blockchain for the number and volume of transactions and the time of their execution. This can help in confirming the information, as well as determining the location of the subject and additional addresses, ”the presentation says.

Note that a significant part of cryptocurrency traders in the United States does not fill out a declaration of income in cryptocurrencies. So, in 2015, the IRS received only 802 such declarations.

In May of this year, the US Tax Service announced plans to issue new tax recommendations on cryptocurrencies. Previous recommendations were issued in 2014 and are now insufficient.

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