In a earlier post, we defined how the U.S. Inner Income Service had launched a query on the 2020 tax kind that requested whether or not “at any time throughout 2020 did you obtain, promote, ship, change, or in any other case purchase any monetary curiosity in any digital foreign money.” The aim of putting this query in a really distinguished a part of the tax kind was to attempt to accumulate among the important quantities of the unreported taxes surrounding crypto-currency transactions as a result of, underneath U.S tax regulation, digital foreign money is handled as property for Federal earnings tax functions. In a FAQ posted to the IRS web site on March 6, 2021, the IRS clarified that there is no such thing as a have to reply that query affirmatively if the one factor a taxpayer did in 2020 was purchase cryptocurrency with fiat.
On the identical time, Forbes reported that, at a March 5, 2021 Federal Bar Affiliation presentation on fraud enforcement priorities, Damon Rowe, the Director of the Workplace of Fraud Enforcement on the Inner Income Service, introduced that the workplace had a brand new devoted staff of IRS Prison Investigation professionals who’re engaged on “Operation Hidden Treasure.” As Forbes defined, Operation Hidden Treasure “is comprised of brokers who’re educated in cryptocurrency and digital foreign money monitoring, and who’re centered on taxpayers who omit cryptocurrency earnings from their tax returns. . . . [it] is a partnership between the civil workplace of fraud enforcement and the felony investigation unit to root out tax evasion from cryptocurrency homeowners.”