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IRS Staff Trained to Find Crypto Wallets

By Mark Lemon – Cryptocurrency Specialist

According to a slide presentation from an Internal Revenue Service (IRS) cyber training session, the IRS might consider subpoenaing several big tech firms such as Google, Apple, and Microsoft to look for undisclosed cryptocurrency holdings of taxpayers that buy Bitcoin or cryptocurrency.

The presentation, in great detail, shows various ways the IRS’s criminal investigators find those that are possibly avoiding tax on their cryptocurrency. Currently, the taxable event is when the user realises their profit or loss when selling crypto.

James Daniels, the IRS’s criminal investigation unit program manager for cybercrimes, stated the following:

“Issuance of a Grand Jury Subpoena should be considered for Apple, Google, and Microsoft for the Subject’s complete application download history.”

This shows the IRS’s resolution in cracking down on those failing to declare tax for buying and selling Bitcoin.

He also believes that each application’s function should be analysed to decide if they may conduct transactions in Bitcoin. This goes to say that apps should be checked to see if they are allowing peer-to-peer transactions or business-related crypto transactions. It is much harder for IRS to investigate any app peer-to-peer for buying crypto as no entity owns the platform.

Earlier this week, the deck was leaked online on Twitter by Laura Walter, a certified public accountant. The agency had later confirmed to CoinDesk that the slides in the leak were indeed legitimate.

Justin Cole, who is the IRS’s criminal investigation unit director of communication and education, said the materials in the slides were presented to the IRS staff at a World Bank event in Washington, DC, on June 5-7 for law enforcement partner audiences. It was provided again at this forum which lead to the information leaking.

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