Crimes related to cryptocurrencies have been on the rise globally and regulatory authorities have been scrambling to curtail them. The US Internal Revenue Service (IRS) is now working closely with the tax departments of the UK, Canada, Australia, and the Netherlands in order to prevent tax evasion on capital gains from crypto-related businesses. Additionally, the IRS is planning to clamp down on money laundering activities via digital currencies and through other types of monetary assets, according to the tax authority’s official announcement on Monday.
There will reportedly be a number of government organizations that will be tackling crypto-related crimes and tax evasion. Per the IRS website, the concerted effort is called “Joint Chiefs of Global Tax Enforcement (J5)” and will consist of six entities: the American Internal Revenue Service Criminal Investigation (IRS-CI), the Australian Criminal Intelligence Commission (ACIC), the Australian Taxation Office (ATO), Canada’s Revenue Agency (CRA), Netherland’s Fiscale Inlichtingen- en Opsporingsdienst (FIOD), and the UK’s HM Revenue & Customs (HMRC).
Reducing “The Growing Threat” Of Tax Crimes
The American tax authority’s website notes that organizations which are part of J5 will be cooperatively sharing intelligence and any information related to the whereabouts of criminal elements involved in crypto. Moreover, the J5 members have agreed to launch joint investigations as they try to cut down on cryptocurrency crimes. The IRS has also said that it will attempt to “reduce the growing threat” to the world’s tax authorities by crimes involving digital currencies.
Reportedly, J5 was put together after the Organization for Economic Cooperation and Development (OECD) demanded that countries throughout the world should work cooperatively to help prevent tax fraud. The government organizations now tasked with weeding out the criminals in the crypto space will also be helping the other OECD member countries to deal with tax fraud and other crimes.
Forward-Thinking Approach To Cryptocurrencies
IRS-CI Chief Don Fort stated that J5 was assembled because there has to be a different way of operating where countries can’t keep:
siloing [their] information from the rest of the world while organized criminals and tax cheats manipulate the system and exploit vulnerabilities for their personal gain. The J5 aims to break down those walls, build upon individual best practices, and become an operational group that is forward-thinking and can pressurize the global criminal community in ways we could not achieve on our own.
The IRS announcement comes at a time when authorities throughout the world have increased their scrutiny and oversight over cryptocurrency crimes. Notably, American and European investigators recently tracked down millions of dollars worth of cryptocurrencies being used illegally for drug trafficking on the dark web. The US Justice Department is also actively monitoring market manipulation in the cryptocurrency market.