$3.5 Billion In Crypto Accounted for 93% of All Assets Seized by IRS in 2021: Report
The agency expects to seize billions of dollars worth of crypto in the coming year after getting more ability to surveil crypto transactions in the infrastructure package, to counter which a comprehensive bipartisan bill has been introduced in the House.
The Internal Revenue Service (IRS) seized $3.5 billion worth of cryptocurrencies during the 2021 fiscal year, according to an IRS criminal investigation annual report published this week.
This figure accounted for 93% of all the assets seized by tax enforcement using this period.
Now, the IRS is expecting to seize crypto valued at billions of dollars linked to tax fraud and other crimes in the coming year as well, as per the agency’s head of criminal investigations.
“I expect a trend of crypto seizures to continue as we move forward into fiscal year ‘22,” IRS Criminal Investigation Chief Jim Lee said on a call with reporters. “We’re seeing crypto involved in a number of our crimes as we move forward.”
In its annual report, the IRS said cybercrimes affecting the US financial systems are seeing “exponential growth” and added that it is now prioritizing training on criminal schemes related to crypto.
Recently, Congress granted the IRS more ability to surveil crypto transactions in the infrastructure package President Joe Biden signed into law on Monday. The law contains the overreaching definition of crypto ‘broker’ to have them track and porter transactions to the IRS.
This week, a comprehensive bipartisan bill has been introduced in the House to clarify the definition of a broker and for other purposes.
— Patrick McHenry (@PatrickMcHenry) November 18, 2021
This bill will “fix EVERYTHING wrong with the infrastructure bill’s crypto tax provision–including the unconstitutional §6050I individual reporting mandate,” said Jerry Brito, executive director of CoinCenter.
He noted that it would replace the overly broad definition of “broker” with one that is reasonably limited to exchanges that buy and sell crypto for customers, will only cover reporting information voluntarily provided by customers and held for legitimate business purposes, and will strike the expanded reporting requirement for digital assets.
“Blockchains, cryptocurrencies, & decentralized finance may still be new & evolving, but Congress must recognize these technologies are some of the most important innovations to come along in a generation,” said Congressman Tim Ryan, along with Patric McHenry, who introduced this legislation.
Congressman Ryan said a balance between consumer protections and reasonable oversight needs to strike while simultaneously providing these technologies with the space to grow, which is essential to taking advantage of this opportunity.