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The Criminal Investigation (CI) Unit of the United Internal Revenue Service (IRS) has disclosed a significant uptick in digital asset-related investigations. The recently releasedannual report unveiled 2,676 cases initiated during the 2023 fiscal year. 
It exposed over $37 billion linked to tax and financial crimes. The CI Unit shed light on the surge in cases involving unreported income derived from crypto transactions. Taxpayers are under scrutiny for neglecting to report capital gains from crypto sales, income generated through cryptocurrency mining, and earnings received in the form of digital assets, including wages, rental income, and gambling winnings.
The unit also flagged instances of evasion. One of them was where taxpayers concealed ownership of cryptocurrency in an attempt to shield their holdings.&nbsp;
Although Jim Lee, the chief of the CI Unit, said that while most crypto users engage in legitimate activities, digital assets present a looming risk for financing terrorism, ransomware attacks, and other illicit endeavors. Since ramping up efforts to combat crypto-related crimes in 2015, the IRS has seized almost $10 billion in digital assets.
The government body has not remained idle in response to this growing challenge. Since 2019, the IRS has mandated U.S. taxpayers to explicitly report digital asset transactions on tax forms.&nbsp;
This move has been reinforced each subsequent year, with additional measures proposed to regulate broker reporting requirements and curb tax evasion. Lawmakers demand clear regulations 
However, recent developments reveal a ripple of discontent within the political sphere. In October 2023, seven U.S. Senators, including Elizabeth Warren and Bernie Sanders, <a href="https://news.todayq.com/u-s-senators-urge-irs-to-speed-up-crypto-tax-reporting-regulations-before-2026/" rel="noopener noreferrer nofollow">urged</a> the Treasury Department and IRS to expedite the formulation of rules governing the reporting of taxes on cryptocurrency transactions.
They expressed concern over a two-year delay in implementing rules that were set to commence in 2026 for transactions in 2025. The senators fear that this procrastination could cost the IRS a staggering $50 billion annually. It will allow non-compliant individuals to evade taxes.
Senators voiced their support for the rules in a joint letter to Treasury Secretary Janet Yellen and IRS Commissioner Daniel Werfel. However, they criticized the prolonged timeline.
They argued that the delay might provide illegal operators an opportunity to thwart these <a href="https://www.linkedin.com/posts/todayq_irs-releases-new-guidelines-on-taxing-cryptocurrency-activity-7092038383358664704-Eg1m" rel="noopener noreferrer nofollow">regulations</a>. Therefore, they demanded urgent government intervention to ensure prompt reporting and taxation of cryptocurrency transactions.
This dual revelation of heightened investigations by the IRS and the senators’ plea for expedited rules adds a new layer of complexity to the evolving landscape of cryptocurrency taxation and enforcement, signaling turbulent times ahead for both taxpayers and regulators alike.
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$37 billion in unreported income, IRS sounds alarm over surge in Crypto investigations

Todayq News

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