The Internal Revenue Service (IRS) released its annual report in January, saying the agency achieved convictions in 91.2% of all cases it prosecuted in 2019.
The IRS report emphasized the agency’s aggressive enforcement activities, but officials also stated the goal is to keep improving their conviction rate.
Report highlights new technologies to evade taxes
The IRS says among those convicted were people that moved money to offshore accounts, while others turned to the dark web, thinking their actions were anonymous. The agency focused on cryptocurrency transactions, such as:
- Features on digital assets, including Bitcoin, that allow users to transfer money with no oversight
- Zcash, Monero and other coins that are designed with additional privacy features, allowing users to scramble transactions making them more difficult to track
IRS alerted cryptocurrency customers
The agency says it made cracking down on cryptocurrency users a priority last year and sent letters to 10,000 individuals using Coinbase, urging them to pay taxes on their crypto holdings or face criminal action. The letter suggested officials would not allow any delays or excuses for failure to pay.
The IRS says 79% of those convicted in 2019 will spend an average of three years in prison, while others were sentenced to home arrest, and were ordered to pay restitution and fines. The agency says it identified $1.8 billion in tax fraud over the year and an additional $4.4 billion in other financial crimes, such as fraud and money laundering.
Seek experienced representation for tax matters
If you are facing an audit or charges related to tax fraud or other controversies, an experienced tax attorney, who is also a certified public accountant, understands the latest changes to IRS laws and procedures and can help devise a plan to resolve the situation.