Report Says ‘Pure’ Cryptocurrency Tax Crime Expected to Increase in U.S.

It is estimated that 40% of adults in the United States currently hold crypto assets, and tax evasion cases are expected to increase. The IRS is ready to handle these cases. The information was disclosed by IRS Chief Investigator Guy Fico. Ficco was speaking at the Chainaanalysis Links event in New York. According to IRS officials, the agency has seen an increase in “pure cryptocurrency tax crimes” that are unrelated to incidents of fraud, money laundering and scams.

USA It is said Taxes on long-term capital gains range from 0% to 20%. Entities that make profits from crypto activities up to $44,626 (approximately Rs. 3.72 crore) in 2023 will not be required to pay any long-term capital gains tax. However, short-term capital gains are taxed at rates as high as 37%, depending on the profits accumulated in the United States.

U.S. nationals who knowingly misrepresent their cryptocurrency profits on their tax returns will be charged a fee under Section 26 of the U.S. tax code. Currently, the IRS is working to identify and target such individuals.

“This could be purely a case of not reporting the revenue generated from cryptocurrency sales, which could be hiding the true basis of cryptocurrencies. So this is an area that we’ve seen an uptick in, and I expect there will be more targeting of Title 26 this year and in the future. allegations in cryptocurrency cases,” Ficco said. CNBC in an interview.

In response to an expected increase in cryptocurrency tax evasion cases, the IRS has formed partnerships with various law enforcement agencies to improve the criminal identification process.

Additionally, the IRS has partnered with blockchain analytics company Chainaanalysis. With the help of Chainaanalysis, the IRS is seeking to understand vulnerabilities in Web3 protocols or settings that could be exploited by cybercriminals to achieve their goals.

While the United States prepares to crack down on cryptocurrency tax evaders, Swedish tech research firm Divly reported shocking details about an international tax evasion case in 2023. The research platform claimed at the time that only 0.53% of global cryptocurrency holders would pay taxes on their cryptocurrency income in 2022.

According to Divly’s report, the Philippines had the lowest proportion of cryptocurrency taxpayers at the time, at just 0.03%. India ranks third from the bottom on the index, with only 0.07% of cryptocurrency holders paying cryptocurrency taxes.

In India, where all cryptocurrency profits are subject to a 30% tax, crypto players are integrating tax services into their platforms so that their users can calculate amounts and pay the government. The Indian Web3 community believes that if discipline and consistency are shown in complying with government laws, the authorities can be more responsive to their needs and provide stronger support for the growth of the industry.

Last July, crypto tax company Taxnodes announced that it would offer free NFTs to people who pay crypto taxes through its platform.