According to a press release published on Monday, July 2, the US Internal Revenue Service(IRS) has announced an international forumto take action on cryptocurrency-enabled crimes made up of tax enforcement authorities from four other countries: the Australian Criminal Intelligence Commission (ACIC) and Australian Taxation Office (ATO), the Canada Revenue Agency (CRA), the Fiscale Inlichtingen- en Opsporingsdienst (FIOD), the British HM Revenue & Customs (HMRC), and the American Internal Revenue Service Criminal Investigation (IRS-CI). It is named as the Joint Chiefs of Global Tax Enforcement or the J5, which will fight trans-national tax crime through increased enforcement collaboration.
Though the exact details affecting cryptocurrencies are unknown, it is likely that the new initiative will include new regulations affecting cryptocurrencies and exchanges.
The IRS posted on its website,“We are convinced that offshore structures and financial instruments, where used to commit tax crime and money laundering, are detrimental to the economic, fiscal, and social interests of our countries. We will work together to investigate those who enable transnational tax crime and money laundering and those who benefit from it. We will also collaborate internationally to reduce the growing threat to tax administrations posed by cryptocurrencies and cybercrime and to make the most of data and technology.”
To reduce the mounting threat to tax administrations induced by cybercrime and cryptocurrency as well as to objectivize intercontinental tax crime and money laundering issues, the special task force representatives, as part of J5, will combine together as an alliance to build criminal investigations.
According to the IRS, the decree to form a transnational taskforce via J5 was in response to the intergovernmental Organization for Economic Co-operation and Development (OECD)’s plea to action for countries to augment their efforts against the enablers of tax crimes.
In early February, the IRS-CI gathered a team of ten new investigators to intensify its pursuit of those who use crypto to escape taxes.
As well as subjecting cryptocurrencies to federal property taxes, the IRS has also taken part in code enforcement alongside the US Department of Justice (DOJ) and the FBI in crypto-related criminal cases, including a major indictment against listings on the website Backpage.com this spring. The site was charged with laundering half a billion dollars in illegal revenue, partly via cryptocurrency.
To overcome difficulties in tracking anonymous crypto transactions, the IRS has been tracking crypto-enabled crimes since 2017 by deploying third-party blockchain intelligence tools such as Chainalysis.