The article below was written by Daniel Kuhn and posted on coindesk.com on March 7, 2021.
It is the second article written about the IRS and their guidance on cryptocurrencies posted to coindesk.com in the last few weeks.
If you do the right thing, you don’t have to worry about the IRS coming after you. Taking profits from any investment should be reported as income and you should pay taxes on the amount of profit which will help your case if the IRS comes after you for unreported crypto income.
Articles like this one will become more prevalent as the Federal Government tries to bring cryptocurrencies under some type of Centralized Authority.
We all know what happens when the Government gets involved in anything, they mess it up to the point where it is no longer looks like what it was designed for.
Instead of this type of article, they should be focused more on public education about cryptocurrencies, but that would go against the unwritten rule of educating the public about money!
They want an unknowing public so that the banks can maintain control of your money, but if you read the U.S. Constitution, the only things recognized as money are gold and silver.
The U.S. Dollar is a CURRENCY, more specifically a FIAT CURRENCY, and has been since August 15, 1971, when President Nixon asked the Treasury to stop the convertibility of the dollar to gold.
There is too much FIAT CURRENCY flowing into cryptocurrencies and until they are fully regulated and under the control of a central authority we will constantly be reminded that Big Brother is watching.
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IRS Initiates ‘Operation Hidden Treasure’ to Root Out Unreported Crypto Income
“These transactions are not anonymous,” the IRS’ national fraud counsel said. “We see you.”
The U.S. Internal Revenue Service (IRS) appears to be stepping up its enforcement capabilities with a new program dedicated to cryptocurrency tax compliance.
With “Operation Hidden Treasure,” the IRS will search for unreported crypto-related income, according to the agency’s Director of the Office of Fraud Enforcement, Damon Rowe.
- Speaking at a Federal Bar Association virtual tax conference, Rowe said cryptocurrency fraud will be a priority. Forbes first reported the news.
- Operation Hidden Treasure, a joint effort between the IRS’s civil office of fraud enforcement and its criminal investigation unit, will train agents to look at blockchains to root out tax evasion among cryptocurrency users. It will exist as part of the office’s emerging threats mitigation team, Forbes said.
- IRS employees are also reportedly training alongside the European Union Agency for Law Enforcement Cooperation (Europol) as part of the initiative.
Carolyn Schenck, national fraud counsel in the IRS Office of Chief Counsel, told conference-goers that the agency is working with private contractors and vendors, presumably blockchain analytics firms, to develop “signatures,” or telltale signs of fraudulent activity.
- These indicators include looking at those who structure transactions just below reporting requirements (like sending a series of $10,000 transactions), using shell corporations to hide funds as well as “getting on and off the chain,” Schenck reportedly said.
- The IRS has sent conflicting messages to U.S. crypto holders several times in the past. Most recently, an updated FAQ page indicated that investors who simply bought “virtual currency with real currency” would not have to report that transaction on this year’s tax returns.
- Still, cashing out crypto or making every-day purchases is typically seen as a taxable event. Operation Hidden Treasure is designed to find, trace, and attribute such transactions to taxpayers, Schenck said.
“These transactions are not anonymous,” she said. “We see you.”