Crypto users, who dodge tax in the United States, are now at a higher risk of jail term following the announcement of a new initiative by the Internal Revenue Service (IRS), an agency of the US government. The new initiative, titled Operation Hidden Treasure, was made known to the public on March 5 at a Federal Bar Association presentation on fraud led by Carolyn Schenck, a high ranking member of the agency.
According to Schenck, the agency would be training and hiring specialists to carry out this new operation. The new initiative is structured to identify users of crypto and other virtual currency who fail to disclose their tax in the country. It would also mainly target individuals with financial activity in blocks of $10,000 or less in order to fly under the radar of the IRS and the requirements of Form 8300.
IRS Wants to Jail Offenders
This indicates that even though platforms like Coinbase report tax information to the IRS with accounts over a certain transaction and balance threshold, the agency is now equipping agents to dig deeper for signs that crypto users are involved in a deliberate attempt to avoid detection.
While explaining the consequences of the being caught for evading tax through Crypto, IRS Criminal Investigation Division Chief, James Lee, who also spoke at the presentation, noted that anyone found guilty “is going to jail.” Even if the government can’t prove that the tax evasion offence was deliberate, there are still civil consequences for this in the US, which includes a 75% penalty on the understated tax.
Due to the known opaque tax payment through crypto, it is advisable for users with undisclosed crypto taxes to consult a tax lawyer. Even though accountants can also provide an insight for crypto users, unlike attorney-client privileges which bounds them with lawyers, accountants could be summoned to testify against them.