IRS Begins Hunt for Hidden Incomes of Crypto Owners

8 Cryptocurrency Tax Nightmares and How To Avoid Them

The head of the IRS Fraud Office Damon Rowe has warned about the start of the special operation “Hidden Wealth”. Speaking at the federal bar with a report on the fight against fraud, he announced the creation of a working group aimed at identifying undeclared cryptocurrencies.

Harboring transactions and ownership of digital assets became a tax crime in 2021, thanks to a change in the 1040 reporting form.

Every citizen and taxpayer in the United States is now obliged to answer affirmatively or negatively to a direct question about the receipt, sale, transaction, exchange or any other way of acquiring any financial interest in any virtual currency.

At one time, the IRS used such simple questions to effectively fight offshore accounts. The answer “no” guaranteed any citizen or company criminal prosecution, even in the event of an empty account in an offshore jurisdiction, which, according to American law, did not exempt from paying taxes.

Operation Hidden Wealth will be a showcase action by the IRS to disappoint those looking to hide behind wallet anonymity. Damon Rowe warned that the group employs professional agents who can de-anonymize transactions on the blockchain using coordinated actions and information from other departments.

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