IRS to Meet With Crypto Firms on a ‘Summit’ in DC Next Month

With the US tax season officially begun on 27th of January, the IRS is going full force to ensure accuracy with tax returns. At least 150 million tax returns are expected from last year, which is no small matter. The IRS will be hosting a Summit in March with numerous cryptocurrency companies, entrepreneurs and public figures who seek to better-inform themselves on everything regarding crypto taxation. The news was first reported by Bloomberg on February 18th.

It’s believed that the initiative came from the United States Congress members who have repeatedly sent letters to the IRS last year, asking for better clarification of crypto taxation and better preventative methods for crypto firms avoiding taxes. The congress members claim that the current IRS guidelines leave a lot to be desired, with lots of unanswered questions and obscure cases, thus needing more information and revision before implementation.

The summit is to be held at the IRS headquarters at Washington D.C. and will be mainly addressing technology, tax returns, regulatory compliance and general issues that exchanges are having regarding taxation.

According to the statement made by the executive director of the Blockchain Association advocacy group Kristin SMITH, the IRS has been considering this summit for at least a month now. Smith believes that the main idea of the event is for the IRS to better-learn about the environment and ecosystem of cryptocurrencies, and to create a more harmonized and robust regulatory and tax environment.

Lawmakers always aim to remove the legal loopholes that companies and individuals use to avoid the taxes they have to pay. These companies mainly use tax havens like offshore islands in the Caribbean who deliberately create these tax environments to attract international companies. This is absolutely legal and is a widely-accepted practice for companies all around the world, but some companies, with their extremely private and secretive approach, create a ripe environment for companies that far exceed the fine line between legal, ethical minimization of taxes and outright criminal activities like tax evasion and money-laundering.

One such example was the OneCoin scandal, a cryptocurrency created by Ruja IGNATOVA of Bulgaria. OneCoin was a multi-billion scam operation of a global scale, with thousands upon thousands of people wiring in money and not being able to withdraw. The actual amount of money made fraudulently is in excess of $4 Bln.

In China alone, law enforcement agencies have identified and recovered 1.7 billion yuan (approximately $267 million), with over 90 people prosecuted.

A US lawyer Mark SCOTT was also controversially involved in the subject, and is currently in court for money-laundering and obscuring the origin of over $400 Mln made from the OneCoin Ponzi scheme. With the millions that Scott made, he bought multi-million dollar mansions, luxury cars, and a huge yacht.

Image courtesy of Market Watch