In brief
- David Klasing, dual-certified tax attorney and CPA, says the IRS has moved from targeting “narrower groups” to broader crypto compliance investigations across multiple exchanges.
- The Treasury Inspector General reports a 75% potential non-compliance rate among crypto users identified through exchange data, feeding the audit pipeline.
- Nick Waytula, attorney and head of tax at Crypto Tax Calculator, warns the enforcement shift creates a “turning point,” moving crypto taxation from “opt-in” to “opt-out” model for millions of users.
The Internal Revenue Service has steadily widened its crypto surveillance capabilities since 2017, moving from narrow probes of individual traders to sweeping requests for user records at major exchanges and crypto companies.
Armed with “John Doe summonses” and increasingly sophisticated blockchain analytics, the agency is now able to trace crypto transactions in real-time, according to legal experts and government filings.
“Initially, the IRS targeted a narrower group of individuals based on specific transaction thresholds,” David Klasing, a dual-certified tax attorney, and CPA specializing in crypto taxation, told Decrypt. “However, recent cases indicate a broader approach aimed at identifying tax non-compliance across multiple crypto exchanges.”
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Author: Vismaya V
