IRS targets crypto tax evaders with ‘Operation Hidden Treasure’

A new program dedicated to digital currency tax regulation is being readied by the U.S. Internal Revenue Service as it adds more teeth to its enforcement capabilities.

Dubbed “Operation Hidden Treasure,” undisclosed crypto-related income will now be on revenue agency’s crosshairs, according to Damon Rowe, IRS Office of Fraud Enforcement chief.

Rowe announced during the Federal Bar Association presentation on fraud enforcement that the IRS has “added some crown jewels,” including a dedicated team of fraud and crime investigators who will form the backbone of Operation Hidden Treasure.

Keeping watch of crypto tax evaders

The goal of OHT is to monitor cryptocurrency transactions to locate individuals or groups of people who are deliberately deleting crypto-related income from their tax returns, IRS officials said.

OHT will train agents to dig deep into blockchains and weed out so-called “crypto tax evaders.” The team of agents will function as part of the IRS’ emerging threats reduction unit, Forbes reported.

According to Carolyn Schenck, National Fraud Counsel & Assistance Division Counsel for the Office of Chief Counsel, IRS is working on “how to get ahead of the game,” and searching for different types of “tax evasion signatures.”

Unscrupulous transactions

Based on the report, these signatures may include what blockchain experts call “structuring,” which means to literally structure crypto transactions in increments of less than $10,000 to avoid certain reporting requirements, “the use of nominees or shell corps” or “getting on and off the chain.”

The staff of the Fraud Enforcement Office is also participating in virtual training with the European Union Agency for Law Enforcement Cooperation, better known as Europol, as per Bloomberg Tax.

Meanwhile, Bitcoin (BTC) is changing hands near the $50,500 level as of this writing, representing a 5% increase, having registered a peak of $51,320 early Monday, CoinDesk 20 data show.

Bitcoin hit $51,000 on Sunday after the US Senate passed a $1.9 trillion stimulus package to ease the country from the devastating effects of the pandemic.

 

Image courtesy of JRNY Crypto/YouTube

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