It has been revealed that, according to a new report, it seems that the IRS criminal investigation unit revealed the fact that the tax investigations have risen a lot in 2023. Check out more details below:

According to a new annual report by the criminal investigation unit of the U.S. Internal Revenue Service (IRS), investigations related to crypto taxes are increasing.

The report highlights that the number of inquiries into digital asset tax has grown, owing to the increasing mainstream adoption of crypto assets.

“These investigations consist of unreported income resulting from failure to report capital gains from the sale of cryptocurrency, income earned from mining cryptocurrency, or income received in the form of cryptocurrency, such as wages, rental income, and gambling winnings.

[Criminal investigation] is also seeing evasion of payment violations, where the taxpayer fails to disclose ownership of cryptocurrency in an attempt to shield holdings.”

Jim Lee, the head of the IRS’s criminal investigation unit, has mentioned that the agency is seeing the results of investing in cyber capabilities and training.

He stated that their partnerships with the private sector have enabled them to solve complex crypto-related crimes worldwide.

The agency is still determined to prevent those who misuse new technology for illegal activities, reduce illicit finance and identify national security risks.

“We know that digital assets provide opportunities for responsible financial innovation, and most people using cryptocurrency do so for legitimate purposes.

But, we also know that digital assets pose a risk of facilitating money laundering, cybercrime and ransomware, narcotics, human trafficking, terrorism, proliferation financing, and tax crimes.”

Lee has observed that tracking digital assets has become more challenging due to the practice of chain-hopping.

Chain-hopping is a technique used for money laundering, where a cryptocurrency is converted to another type, and the funds are transferred across several chains, according to the U.S. Department of Justice (DOJ).