Inspector general tells IRS to step up bitcoin tax strategy

The Internal Revenue Service (IRS) has been called to task over its lax monitoring of digital currency transactions in the United States.

According to the Treasury Inspector General for Tax Administration (TIGTA), the agency isn’t doing enough when it comes to addressing income streams produced via cryptocurrency, particularly bitcoin. This, in turn, creates a risk that taxable sales involving digital currencies may go undetected.

In a newly released report, TIGTA pointed out the existence of “little evidence of coordination” between different parts of the IRS on policing virtual currency transactions.

“None of the IRS operating divisions have developed any type of compliance initiatives or guidelines for conducting examinations or investigations specific to noncompliance related to virtual currencies. In addition, it does not appear that any of the actions already taken by the IRS to address virtual currency tax noncompliance were coordinated to ensure that the IRS maintains a strategic approach to the tax implications of virtual currencies,” the report stated.