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IRS Sets Up Cryptocurrency Tax Crime Investigation Group

Bitcoin dissolving into the air

 

In July, 2018, the IRS set up an international group who will be investigating cryptocurrency tax crimes, general tax fraud and the money laundering crimes that go with them.

  • The group is called the Joint Chiefs of Global Tax Enforcement or the J5.
  • Their motto is: “Combating transnational tax crime and money laundering through increased enforcement collaboration”.
  • The 5 countries in the group include: Canada, Australia, the Netherlands, the UK, and the US.
  • The J5 has been because the Organisation for Economic Co-operation and Development asked for some international efforts to help reduce tax crimes.
  • The 5 countries will be working together gathering information, sharing intelligence, conducting operations and building the capacity of each individual country’s tax crime enforcement process and officials.

 

The Business Insider reports that the Internal Revenue Service has decided to take an international approach to these cryptocurrency and money laundering types of crime.

Joint Chiefs of Global Tax Enforcement or the J5

The IRS created the Joint Chiefs of Global Tax Enforcement (J5), which is a group of 5 countries all interested in working together to investigate cryptocurrency crimes, which will include money laundering and tax fraud. The goal is to “reduce the growing threat posed to tax administrations by cryptocurrencies and cyber crime,” the IRS spokesman has said.

International transfers are easy wit cryptocurrencies. This is why the governments of the 5 countries are concerned. Investigations are difficult and so are prosecutions when the criminals are using virtual currencies and crossing borders. 

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The Decision to Form The J5

The chief of IRS-CI, Don Fort, explained how the decision came about for the international effort to Forbes:

“We cannot continue to operate in the same ways we have in the past, siloing our 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.” said Fort.

The Future of Cryptocurrencies

The J5 is convinced that offshore financial structures are being used to commit tax crime and money laundering. They are working together to reduce the threat of cryptocurrencies and cybercrime.

Although all activity using cryptocurrencies is not of a criminal nature, some of the activity will evade taxes or launder money. The very nature of the cryptocurrency makes investigating these activities difficult, without the co-operation of the governments on the other sides of the borders. The J5 is the first step to more effective investigations.

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Fulton Abraham Sanchez, CPA

Fulton Abraham Sánchez, CPA is a Certified Public Accountant, specialized In Tax Planning, International Business, Wealth Management and Offshore Banking. You can email him to fa@fascpaconsultants.com or follow us on Facebook : FAS CPA & Consultants.

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