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IRS’s ‘Operation Hidden Treasure’ Focusing on Crypto Fraud

March 5, 2021, 6:18 PM

The IRS’s Fraud Enforcement Office, in an effort known as “operation hidden treasure,” is tracing cryptocurrency transactions to find people who are omitting crypto-related income from their tax returns, agency officials said.

The project exists within the office’s emerging threats mitigation team, Damon Rowe, executive director of the Fraud Enforcement Office, said Friday during a virtual tax conference hosted by the Federal Bar Association.

  • The agency’s Criminal Investigation division has been sharing its technology and expertise with the office to address potential cryptocurrency tax evasion, Rowe said.
  • The Fraud Enforcement Office employees are also participating in virtual training with the European Union Agency for Law Enforcement Cooperation, better known as Europol. During the training, which is also used by CI, employees put their skills up against cryptocurrency investigators around the world, Rowe said.
  • The IRS has also been working with private contractors to identify key indicators, or “signatures,” of fraudulent activity, said Carolyn Schenck, national fraud counsel in the IRS Office of Chief Counsel. “These transactions are not anonymous,” she said. “We see you.”
  • Read More: IRS Stance on Crypto Spurs Confusion, Relief in Tax Profession

To contact the reporter on this story: Allyson Versprille in Washington at aversprille@bloombergtax.com

To contact the editors responsible for this story: Patrick Ambrosio at pambrosio@bloombergtax.com; Colleen Murphy at cmurphy@bloombergtax.com

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