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Today twitter user "Crypto Tax Girl" posted some insights she received by viewing 181 slides that the IRS uses to train special agents on cryptocurrency and how to investigate taxpayers who hold crypto. The insights are a bit chilling, as the main assessment is that the IRS is working hard across multiple channels to find out who has been hiding taxes from the government.
I recently got hold of a presentation given to special agents in the IRS Criminal Investigation division that discussed investigating taxpayers who hold crypto.
— Crypto Tax Girl (@CryptoTaxGirl) July 8, 2019
I went through all of the 181 horribly formatted slides (attached for reference haha) and here's what I learned... pic.twitter.com/YQqHVR5Dv7
Whatever the IRS is up to, it is clear from the slides that Powerpoint lessons are not part of their agenda. That being said, it is what Crypto Tax Girl elaborated on that was the most important, both for those who may be liable as well as anyone concerned with privacy. The most important points were laid out in the following tweets:
The IRS plans to use interviews, open-source searches, electronic surveillance, social media searches, and Grand Jury subpoenas given to a variety of companies.
— Crypto Tax Girl (@CryptoTaxGirl) July 8, 2019
You would think that these subpoenas would be served to crypto exchanges, but the IRS plans on serving them to Apple, Google, and Microsoft in order to search through taxpayers' download history to see if they have ever downloaded cryptocurrency applications.
— Crypto Tax Girl (@CryptoTaxGirl) July 8, 2019
Another slide mentions that the agents should be sure not to notify the taxpayer about the obtainment of information regarding their use of bitcoin, because such notification could be detrimental to the investigation.
— Crypto Tax Girl (@CryptoTaxGirl) July 8, 2019
The IRS also plans on serving subpoenas to collect bank, credit card, and Paypal records. These records should be analyzed to determine if any payments in or out went to parties that can send or receive crypto.
— Crypto Tax Girl (@CryptoTaxGirl) July 8, 2019
The IRS also plans to review Facebook, Twitter, and other social media platforms to find publicly available BTC and ETH addresses.
— Crypto Tax Girl (@CryptoTaxGirl) July 8, 2019
As scary as these methods sound, anyone who has nothing to hide should be fine. Still, privacy advocates likely will have a lot to say about the IRS gathering so much data on taxpayers without their knowledge or consent.
Of course, some on twitter had similar thoughts:
I often see people “bragging” about not paying taxes on their earnings. I never argue as it would be nonproductive but I secretly know it will catch up to them later. This strategy does seem invasive so time will tell if it will happen. I see someone suing IRS over this.
— Robin Dennis (@robindenniscpa) July 8, 2019
Whatever happens, it is likely we will see a crackdown on cryptocurrency tax evaders in the coming years, at least in the US. When it happens, stick with Chepicap for all updates!