IRS Criminal Investigation Unit Taking on More Crypto Tax Cases

The Internal Revenue Service crime unit that played a leading role in the Binance Holdings Ltd. probe is seeing a surge in cases involving crypto-related tax evasion, according to the division’s leader.

Three years ago, the vast majority of the active crypto investigations — upwards of 90% — involved money laundering, Jim Lee, chief of the IRS’s criminal investigation division, told reporters on a call Monday. But in the past year, about half of the digital-asset probes have involved tax, he said.

These investigations cover a range of issues — from taxpayers failing to report income from capital gains or ...