America’s top tax authority, the Internal Revenue Service (IRS) has issued a chilling warning to small and medium-sized enterprises (SMEs) that deal with cryptocurrencies. The agency said that it will step up its collection efforts and criminal investigations for SMEs dealing in and altcoins, making use of advanced new analytics tools, and claiming it has trained its agents to “value and seize” tokens.
Earlier this month, the IRS appointed Eric Hylton as commissioner of the small business and self-employed division, with Darren Guillot and De Lon Harris taking deputy commissioner roles at the agency.
And per a report from Accounting Today, the trio recently spoke to the media, explaining the IRS’ latest plans for cryptocurrency tax enforcement in the SME sphere.
The media outlet quoted Hylton as stating,
“Cryptocurrency is an area that we want to look at, and take a strong look [at] from an examination and collection standpoint as well.”
The commissioner stated that as “cryptocurrency is an emerging issue,” his department was “collaborating with the Large Business & International office,” and was looking at launching possible criminal investigations into non-payment cases for SMEs.
Guillot, meanwhile, stated that the IRS is now training staff on how to judge the value of cryptocurrencies, and how to quiz people on the status of their holdings.
He said, “We have spent a considerable amount of time and effort over the past year making sure that the revenue officers throughout the country have training on how to detect, evaluate and determine the value of [cryptocurrencies], and also where taxpayers are not in compliance.”
Guillot added a stern note of warning, saying,
“Where taxpayers are not working to resolve their tax balances with us amenably, or are in possession of [cryptocurrency], we have trained our employees on how to value those assets and seize them [...] We will routinely ask taxpayers as part of a financial interview whether or not they possess [cryptocurrency holdings].”
The agency added that it has “a number of analytical tools” at its disposal that let agents identify SME and self-employed taxpayers with crypto holdings.
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