Anticipated Surge in Cryptocurrency Tax Evasion Predicted by Head of IRS Investigation

The United States Internal Revenue Service (IRS) is preparing for a significant increase in crypto tax crimes as the deadline for filing taxes approaches. Guy Ficco, the chief of IRS criminal investigation, stated at the Chainalysis Links event in New York that his agency is ready to tackle the rise in tax fraud and evasion cases. Tax code Title 26 refers to citizens who intentionally avoid paying taxes by lying or concealing their reporting documents. Ficco noted that while crypto has historically been associated with financial crimes like fraud, scams, and money laundering, there has been a noticeable surge in “pure crypto tax crimes” recently, with more expected in the near future. These crimes could involve not reporting income generated from crypto sales or concealing the true basis of crypto assets. To combat this, the IRS has partnered with blockchain analysis firm Chainalysis and other law enforcement agencies. Ficco emphasized the importance of properly filing taxes to avoid penalties from the IRS. He also revealed that his agency has become more aggressive in investigating and prosecuting U.S. citizens who have failed to report their crypto taxes or have intentionally misled on their tax returns. Ficco’s statements come after the indictment of a Texas man, Frank Richard Ahlgren III, for filing false tax returns and avoiding reporting requirements on over $4 million in Bitcoin gains.