IRS Seeks Millions More in Funding to Pursue Cryptocurrency Tax Evasion

The Internal Revenue Service (IRS) is ramping up its efforts to crack down on cryptocurrency tax evasion, with the Criminal Investigation Division (CI) seeking millions more in funding to bolster its enforcement capabilities.

According to the IRS’s Congressional Budget Justification & Annual Performance Report and Plan, the agency is requesting an additional $32.3 million to enhance its crypto tax collection efforts. This funding would be used to expand the use of specialized contractor support services provided by cyber/crypto experts, as well as to build an internal dashboard for blockchain analytics.

In addition, the funding would go towards hiring private sector expertise in applied analytics, cybercrime, forensic accounting, investigative support, and related consulting services. This request is part of a larger budget proposal of $13.2 billion for the 2022 fiscal year, representing a 10% increase from the previous year.

President Joe Biden has also proposed injecting $80 billion into the IRS over the next 10 years to expand the agency’s enforcement staff and provide them with new tools to combat tax evasion. The Biden administration recently outlined new crypto reporting requirements in a 2022 budget proposal, including measures aimed at improving “broker information reporting with respect to cryptocurrency assets” and implementing a “comprehensive financial account reporting” structure for tax compliance purposes.

With the IRS seeking additional funding and the Biden administration pushing for stricter crypto reporting requirements, it is clear that the government is taking steps to ensure that individuals and businesses are compliant with tax laws when it comes to cryptocurrency transactions. Stay tuned for further developments on this evolving story.