The Internal Revenue Service (IRS) said it would increase criminal investigations in the area of digital asset transactions and listed transactions.
The federal agency identified certain transactions to have high-risk issues in noncompliance and vowed to ramp up enforcement in those transactions.
The IRS is now laser-focused on a variety of compliance matters
“The IRS tracks many known, high-risk issues in noncompliance, such as digital asset transactions, listed transactions, and certain international issues. These issues arise in multiple taxpayer segments, and data analysis shows a higher potential for noncompliance,” the tax agency wrote in its newly-released funding plan.
“We will prioritize resources to increase enforcement activities, including criminal investigation as appropriate,” the agency added.
The IRS is creating tools to support digital asset reporting and compliance
According to the plan, the IRS will develop the information platform to support digital asset reporting and analytics tools to increase digital asset compliance in the fiscal year 2024, which is between April 1, 2023, and March 31, 2024.
Digital assets include convertible virtual currency, cryptocurrency, stablecoins, non-fungible tokens (NFTs), and other digital representations of value, according to the IRS website.
The IRS treats digital assets as property and requires taxpayers to report taxable gains or losses from digital asset transactions.
As it’s difficult to identify the owners of digital assets, U.S. judges allow the IRS to use “John Doe summons” to seek the identities of taxpayers of interest.
A “listed transaction” is a transaction that is the same as or substantially similar to one of the types of transactions that the IRS has determined to be a tax avoidance transaction and has been identified by notice, regulation, or some other form of published guidance confirming its listed transaction status.
We're here to help you stay compliant with your digital and listed transactions
At Tax Problem Solver, we know all the ins and outs of proper tax reporting. So if you're involved in digital/crypto transactions, along with other transactions the IRS now has its focus on – and if you're not sure how to properly file with the IRS, please get in touch! We'll help you get things sorted out, and we'll make sure your taxes are done right and filed properly with the IRS to avoid any problems.
Contact me by one of the methods below in the blue box, or you can email me at Larry@TaxProblemSolver.com and we can dive into your specific issues and solve them. You can also click here to book a free consultation with me or a member of my team.
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