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IRS Seeks $32M Budget for Crypto Tax Enforcement

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IRS Seeks $32M Budget for Crypto Tax Enforcement

The U.S. Internal Revenue Service has requested a sizeable budget to investigate crypto crime and chase cryptocurrency-related taxes for 2022.

The IRS laid out its plans in the “Congressional Budget Justification & Annual Performance Report and Plan” for the fiscal year 2022.

In the section pertaining to crypto assets and criminal investigations involving them, the tax department laid out a budget proposal of $32.2 million. The report stated that the total budget request was $13.2 billion, 10.4% more than the fiscal year 2021.

According to the IRS the funding is needed to “collect $3.5 trillion in taxes to fund the government, and strengthen tax compliance.”

Taxman comes for crypto

The agency broke down the enhancement of enforcement operations budget into three areas. It allocated $3.34 million for IT specialists, $6 million for hardware and software, and $23 million for contractual services.

As the IRS expands its arsenal, it is also seeking the services of external experts in the field of blockchain, cryptocurrencies, cybercrime, and analytics.

It plans to build an internal dashboard for cryptocurrency and blockchain analytics called STRIKES. There are also plans to and establish a “One-IRS approach to cryptocurrency non-compliance around both tax and non-tax case development,” it added.

The dashboard would harness the power of existing vendor products to combine them and take advantage of the strengths each provides.

The IRS stated that it would be partnering with other business units to bring on investigators to provide illicit activity pattern identification and monitoring.

“Paired with extensive intelligence gathering, these contractors would supply proactive lead generation around tax compliance and illegal activities involving cryptocurrency.”

IRS asks Congress for help

In a related development, IRS Commissioner Charles Rettig said on Tuesday that Congress needs to provide clear statutory authority for the tax agency to collect information on cryptocurrency transfers valued at over $10,000 that largely go unreported.

According to Reuters, he noted the cryptocurrency market capitalization stating that there are more than 8,600 exchanges worldwide, “and by design, most crypto virtual currencies are designed to stay off the radar screen.”

The Biden administration’s fiscal 2022 revenue proposals included a new requirement that cryptocurrency transfers of $10,000 or more be reported to the IRS in much the same way that banks report cash transfers.

In May, BeInCrypto reported that the U.S. Treasury planned to raise an additional $700 billion through new tax compliance measures including the aforementioned reporting.

The post IRS Seeks $32M Budget for Crypto Tax Enforcement appeared first on BeInCrypto.


All content in this article is for informational purposes only and in no way serves as investment advice. Investing in cryptocurrencies, commodities and stocks is very risky and can lead to capital losses.

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