The U.S. Internal Revenue Service’s (IRS) criminal chief says that the agency is reportedly building hundreds of crypto tax evasion cases.
According to a new report by Bloomberg Tax, IRS criminal head Jim Lee says that the agency’s Criminal Investigation unit is probing cases where people are not reporting instances of exchanging crypto to fiat or receiving payments in digital assets.
Lee says that he’s seen a shift during the last three years in terms of investigating digital assets. He highlights that previously, most crypto cases the IRS looked into involved money laundering. But now, tax-related crimes are taking up 50% of the pile.
An annual report published by the IRS Criminal Investigation division finds that $5.7 billion in tax fraud has been uncovered in 2022 alone, while over 3,000 of the agency’s employees spent about 72% of their work time investigating tax-related crimes.
The yearly report also mentions some of the agency’s successes against bad actors in the digital asset space, such as Bruce Bise and Samuel Mendez, the founders of crypto startup Bitqyck, who defrauded tens of millions of dollars out of 13,000 investors in 2016.
Bise and Mendez promised massive returns to those “who missed out on Bitcoin,” only to take their money and use it to fund lavish lifestyles. According to the report, the duo received a combined eight-year sentence behind bars after pleading guilty to underreporting their income to the IRS and failing to file corporate tax returns.
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