Title 26 of the United States Code addresses tax evasion, targeting deliberate underpayment or non-payment of taxes through illegal means such as underreporting income, inflating deductions, or hiding money offshore. The IRS has observed an increase in “pure crypto tax crimes,” including not reporting income generated from crypto sales and hiding the true basis of crypto.
To combat crypto crimes, the IRS has partnered with Chainalysis and other law enforcement agencies, utilizing special tools to track cryptocurrency transactions. The IRS has intensified its investigation into cases involving U.S. residents who have failed to report their crypto taxes or filed false tax returns.
In a specific case, a Texas citizen was charged with filing false tax returns on over $4 million worth of Bitcoin gains. This issue extends beyond the United States, with $4.6 million in unpaid taxes recovered from defaulters in 2024.