The IRS to seize cryptocurrency if not reported in tax filings

The IRS to seize cryptocurrency if not reported in tax filings

The IRS has more surveillance capabilities that will help it track crypto accounts

The Internal Revenue Service (IRS) will move ahead with its bid to increase cryptocurrency surveillance, with a past report suggesting how the information could be used. The agency is prepared to keep tabs on Americans’ cryptocurrency usage via an anticipated 8 billion new returns, and the Department of Justice (DOJ) could soon have the means to begin seizing cryptocurrency at an unparalleled rate.

The report covered an extensive range of subjects, with four categories suggesting methods to aid prosecutions, improve investigations, boost penalties for crypto-related crimes and expand the resources obtainable for government employees.

The report declares that “it is critical that the United States have the authority to forfeit the proceeds of cryptocurrency fraud and manipulation as a means of deterring such activity and divesting violators of their ill-gotten gains.” Consequently, the DOJ suggests extending its authority over criminal, civil, and administrative forfeitures.

The agency contends these updates are required because the department’s background with crypto-related cases has “revealed limits on the forfeiture tools used to deprive wrongdoers of ill-gotten gains and, in certain cases, restore funds to victims.”

The DOJ complimented this process for enabling an “efficient allocation of government resources” while preventing “undue burdens on the federal judicial system.” This seems to be the DOJ’s preferred process since administrative forfeitures were 78% of the total amount seized from 2000 through 2019.

The DOJ could also discover new ways to confiscate cryptocurrency, as it’s crucial to emphasize that these confiscations don’t require an actual crime being committed, only suspicion.

If the IRS proposal moves forward, crypto users should carefully watch how all government agencies will eventually use that information.

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