IRS CI: Expect Cryptocurrency Seizures to Continue in 2022
Posted in News, Offshore Account Update on February 14, 2022 | Share
In 2021, the Internal Revenue Service’s Criminal Investigation Division (IRS CI) seized $3.5 billion in cryptocurrency assets. This accounted for 93 percent of IRS CI’s total seizures during the year. But, while this may have been atypical in comparison to years past, it may ultimately prove to be the start of a new trend moving forward. Washington D.C. tax lawyer Kevin E. Thorn, Managing Partner of Thorn Law Group, explains.
IRS CI Chief Says “Trend” of Cryptocurrency Seizures Will Continue
As reported by Fortune, the IRS “could seize cryptocurrency valued at billions of dollars . . . linked to tax fraud and other crimes in [2022].” The publication quotes IRS CI Chief Jim Lee as stating to reporters:
“I expect a trend of crypto seizures to continue as we move . . . into fiscal year ’22 . . . . We’re seeing crypto involved in a number of our crimes as we move forward.”
This includes not only crimes such as tax evasion and tax fraud, but also money laundering, distribution of illegal narcotics, and other non-tax-related offenses. IRS CI has expanded its net in recent years, and it is partnering with the Federal Bureau of Investigation (FBI) and other agencies to target criminal enterprises – both large and small – that rely on the relative anonymity of cryptocurrency transactions.
While the increase in the volume of federal cases involving cryptocurrency may be partially attributable to an increase in cryptocurrency-related crimes, it likely has even more to do with the federal government’s enhanced focus on Bitcoin, Ethereum and other cryptocurrencies. IRS CI and other authorities have prioritized targeting cryptocurrency-related tax fraud and other crimes recently, and these authorities are devoting substantial resources to developing new technologies and building their teams of agents with cryptocurrency-specific training.
As a result, as opposed to being an anomaly, 2021 is more likely a harbinger of things to come. This means that investors need to prioritize cryptocurrency tax law compliance, and others must ensure that their activities are not putting them at risk for an IRS CI investigation.
What Cryptocurrency Investors Need to Know about IRS Compliance in 2022
With cryptocurrency enforcement currently standing as a top federal law enforcement priority, investors need to be extremely careful to ensure compliance. This means accurately disclosing all reportable transactions on their returns, and it means paying what they owe on time. Federal tax law violations carry substantial penalties; and, if IRS CI agents determine that a cryptocurrency-related reporting or payment violation is willful, they can work with the U.S. Department of Justice (DOJ) to pursue criminal charges.
Contact Washington D.C. Tax Lawyer Kevin E. Thorn
If you have concerns about cryptocurrency tax law compliance or are currently facing scrutiny from IRS CI, we encourage you to contact us promptly for more information. To request a confidential initial consultation with Washington D.C. tax lawyer Kevin E. Thorn, Managing Partner of Thorn Law Group, please call 202-349-4033, email ket@thornlawgroup.com or inquire online today.
