IRS Launches New Pilot Program To Combat Cryptocurrency-Related Tax Crime Across the World

According to reports, the US Internal Revenue Service (IRS) has announced a new pilot program starting this summer and will dispatch four commissioners to Australia, Singapore, Colombia, and Germany to combat international financial and tax criminal activities related to cryptocurrency, decentralized finance, and mixed money laundering transaction services. The program will last for 120 days from June 2023 to September 2023. （TechCrunch）

IRS: four commissioners will be sent to Singapore, Australia, Colombia and Germany to fight against DeFi and cryptocurrency international financial crime

In recent years, cryptocurrency and blockchain technology have emerged as revolutionary technologies, offering financial and investment opportunities to millions around the world. With its increasing popularity, the need for proper regulation and monitoring is also on the rise. According to reports, the US Internal Revenue Service (IRS) has announced a new pilot program starting this summer and will dispatch four commissioners to Australia, Singapore, Colombia, and Germany to combat international financial and tax criminal activities related to cryptocurrency, decentralized finance, and mixed money laundering transaction services. The program will last for 120 days from June 2023 to September 2023.

What is the IRS Pilot Program?

The new pilot program by the IRS is a collaboration between four countries’ tax administrations to address cross-border tax and cryptocurrency crimes. The program will include the formation of a joint task force, which will work closely with experts from the countries’ financial and tax regulatory bodies to identify and track down tax evaders and money-laundering criminals engaged in cryptocurrency trading.

The Need for the Pilot Program

The use of cryptocurrency and decentralized finance exchanges has grown rapidly in recent times. However, many still continue to use these platforms to carry out illicit activities. The IRS had been constrained by the lack of uniformity in global tax laws, which hindered its ability to investigate and prosecute people involved in such crimes. The new pilot program will enable the IRS to work closely with international tax agencies and regulatory bodies to develop and implement a comprehensive framework for regulating cryptocurrency transactions and combating illegal activities.

Goals of the IRS Pilot Program

The primary objective of the IRS pilot program is to gather information and apply it to the creation of a comprehensive tax and regulatory framework to address cryptocurrency transactions. This new system will enable tax agencies worldwide to effectively monitor and enforce applicable tax laws concerning cryptocurrency trading. The four commissionaires will be working as a team to identify and track down large taxpayers that fail to report their cryptocurrency trades and earnings.

The Benefits of the Pilot Program

The pilot program offers a unique opportunity for tax authorities worldwide to exchange vital information that will allow them to effectively track cryptocurrency transactions and the people involved in such transactions. The collaboration will make it difficult for tax evaders and criminals to launder money through complex digital asset networks.
The program will also provide the IRS with valuable information on the use of cryptocurrency and how new technologies can be integrated into the tax system. With a framework to implement taxation on new forms of financial transactions, the government can generate more revenues from these transactions, hence increasing its financial liquidity.

Impact of the Pilot Program

The IRS pilot program is a significant step towards the regulation of cryptocurrency globally. The program will create a comprehensive framework for the regulation of cryptocurrency transactions and the people involved in it, making it more difficult for criminals to exploit the cryptocurrency space for their illegal activities.
Furthermore, the program will assist international tax authorities in enforcing global regulations on cryptocurrency trading, ensuring that everyone pays their fair share of taxes. The program’s success will also serve as a precedent for other countries to follow, promoting uniformity in global cryptocurrency regulations.

Conclusion

The IRS pilot program is a welcome development in the cryptocurrency industry. The collaboration between the tax authorities promises to make it more difficult for people to use cryptocurrency for illicit activities. With this pilot program, the IRS will be better equipped to tackle tax evaders and criminals operating in the cryptocurrency space. This program will also provide the necessary framework for tax authorities worldwide to monitor these transactions and regulate them accordingly.

FAQs

1. What is the IRS pilot program?

The IRS pilot program is a collaborative effort between four countries’ tax administrations to combat international financial and tax criminal activities related to cryptocurrency, decentralized finance, and mixed money laundering transaction services.

2. How long will the IRS pilot program last?

The program will last for 120 days, from June 2023 to September 2023.

3. What benefits will the IRS pilot program offer?

The pilot program will provide the IRS with valuable information on the use of cryptocurrency and how new technologies can be integrated into the tax system. It will also assist international tax authorities in enforcing global regulations on cryptocurrency trading, making it more difficult for criminals to exploit the cryptocurrency space for their illegal activities.