The Internal Revenue Service has taken on the uphill task of taxing cryptocurrency traders who are having trouble with the crypto exchange platforms. In a recent statement, the tax-collecting agency claimed that they want the firms to do better in terms of providing them with the information of their account holders. In lieu of an infrastructure bill, the IRS needs access to accurate information about the crypto holdings of investors.
To get the information, IRS relies on crypto exchange platforms. However, the latest conjecture by IRS indicates that the agency is facing blockades in this regard. National Fraud Counsel Carolyn Schenck was the one to issue these remarks. She claimed that the board information responses from cryptocurrency firms like Coinbase, Circle, and Kraken are not helpful.
Lack of Compliance and Cooperation
Commenting on the matter, IRS official Schenck said at the Tax issue panel that the agency is getting more serious about crypto-related regulations. She further explained that the agency has pending cases at several levels of legal proceedings. She said that due to the lack of factual information, many people are waiting for a long time to get justice and a final ruling on their appeals.
Schenck claimed at one point that the prosecutors at IRS have no choice but to employ the John Doe letter-style testimonies in the court. She claimed that in the past, such requests had been submitted to all the major cryptocurrency exchange platforms operating in the region. She further explained that at this point, it is not right to go after the crypto firms for corroborating or colluding with the tax defaulters.
IRS has also called for an increase in its funding to improve its crypto-related investigations. The onslaught of the Pandemic has resulted in a sharp decline in tax collection. The government agency seems to make up for the lost Tax revenue from the crypto traders. Schenck concluded her address by claiming IRS is examining every tax collection report with the suspicion that there are undeclared crypto gains involved.