According to Law360, a joint international tax enforcement group that includes the Internal Revenue Service and agencies from four other countries will be turning its sights toward decentralized cryptocurrency exchanges and nonfungible tokens, the IRS' Criminal Investigation chief said on March 4, 2022.
The Joint Chiefs of Global Tax Enforcement, or J5, which also includes Australia, Canada, the Netherlands and the U.K., is currently planning the initiative, known as a challenge, said Jim Lee, chief of the IRS' Criminal Investigation arm, during the Federal Bar Association's annual tax law conference, held online.
Told To Produce Results, Lee Said.
"And that's exactly what they do," he said. "At the end of the day, each country walks away with operational leads."
Justin Cole, director of the office of communication in the IRS' Criminal Investigation division, told Law360 this year's challenge will occur in mid-May in London.
Nonfungible tokens, or NFTs, first appeared in 2014 and generally function as a certificate of ownership for a work of intellectual property, such as a music file. They're distinctive data units stored on a noneditable, public ledger called a blockchain and unlike cryptocurrencies are not intended as a unit of exchange.
The NFT and cryptocurrency exchange initiative will be the J5's fourth challenge. Prior challenges have focused on enablers of tax evasion, cryptocurrency and then cryptocurrency and the financial technology industry. The J5 was formed in 2018.
Lee also touted the CI division's inclusion in a task force the U.S. Department of Justice unveiled on March 2, 2022 meant to track down violators of sanctions against Russia for its invasion of Ukraine and seize assets of Russian oligarchs.
Lee said the CI division was "a perfect fit for the task force" and will invest resources in it as appropriate.
The task force, known as KleptoCapture, is allowed to investigate and prosecute any offense related to its mission, including various tax offenses, bank fraud and money laundering, according to a DOJ statement.
Cole said the hiring of those special agents is currently part of the division's appropriated budget. He also said professional staff or support personnel can include roles such as investigative analysts, data scientists, human relations, finance and communications. A variety of professional staff workers will be hired to support the entire division, not just the new agents it hopes to hire, Cole said.
Read more at: Tax Times blog