Crypto Gets Swept up in International Tax Evasion Crackdown

By CCN: An international tax evasion authority comprising five major global economic powers is taking cryptocurrency seriously. A year ago, five world powers created the Joint Chiefs of Global Tax Enforcement, or J5, with a particular interest in cryptocurrencies. The J5 Group including tax authorities in the U.S., U.K., Canada, Australia, and the Netherlands is at the helm of 50 investigations into global tax evasion.

The Sydney Morning Herald reported Thursday that of the 50 lines of inquiry, Australia is directly involved in 12. At least one of the subjects of the Australian Tax Office’s investigation is an unnamed international financial institution. Cryptocurrencies and related technologies, however, are a major focus of the tax evasion sweep.

There are still many critics who scoff at cryptocurrency and call it “delusional,” a bubble, a fad. But some of the world’s most wealthy governments perceive a serious threat to their tax revenues alone.

Crypto ‘Tumblers’ and Tax Evasion

cryptocurrency tax evasion

Pop music star Shakira is in trouble for tax evasion in Spain, but no one is imputing her case to the entire music industry. | Source: Ruptly via Twitter.

There are many countermeasures like crypto “mixers” that essentially launder tokens. But the openness, transparency, and immutability of many blockchain ledgers might make the authorities’ job easier for them.

Australia Tax Office deputy commissioner Will Day reportedly says:

“At no other time have criminals been at greater risk of being caught. In Australia, they are often intermediaries who are playing a role between the tax evader and an offshore entity.”

The successful use of the blockchain by authorities like the FBI to catch cybercriminals underscores the deputy commissioner’s point.

Higher Tax Rates: Less Tax Compliance

There’s an apparent need for an international tax force with unprecedented information between the revenue authorities of major governments. But that might evince that taxes are just too high….

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