IRS Wants $32M in Funding to Enforce Crypto Taxation, Hire Contractors

The IRS has outlined different ways that $32.3 million in additional funding will bolster the agency's crypto tax collection efforts.

AccessTimeIconJun 9, 2021 at 3:14 a.m. UTC
Updated Sep 14, 2021 at 1:08 p.m. UTC

The Internal Revenue Service's (IRS) Criminal Investigation Division (CI) wants millions more in funding to pursue cryptocurrency tax evasion.

According to the tax agency's Congressional Budget Justification & Annual Performance Report and Plan, the IRS has outlined a number of avenues that $32.3 million in additional funding will bolster the agency's crypto tax collection efforts.

These include expanding the use of specialized contractor support services provided by a group of cyber/crypto experts and building an internal dashboard for blockchain analytics.

If approved, the funding will also go towards hiring private sector expertise in applied analytics, cybercrime, forensic accounting, investigative support and related consulting services, according to the report.

The $32.3 million figure the tax agency is seeking forms part of a much larger budget request of $13.2 billion for the 2022 fiscal year, an increase of $1.2 billion, or roughly 10%, from the previous year.

U.S. President Joe Biden plans to inject $80 billion into the IRS over the next 10 years to expand the agency's enforcement staff and equip them with new tools to fight against tax dodgers.

The Biden administration also recently outlined several new crypto reporting requirements in a 2022 budget proposal, published last month.

The budget included two proposals that took aim at "broker information reporting with respect to cryptocurrency assets” and a “comprehensive financial account reporting” structure for tax compliance purposes. The second proposal would require financial institutions to report data on user accounts transacting above a $600 threshold.

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