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The IRS is trying to identify potential virtual currency transactions of taxpayers.

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The IRS is trying to identify potential virtual currency transactions of taxpayers.

The Internal Revenue Service (IRS) may consider subpoenaing major U.S. tech companies such as Apple, Google, and Microsoft to search for undisclosed cryptocurrency holdings by taxpayers.

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According to slides from a recent online training session by the US Internal Revenue Service (IRS), various potential methods of cryptocurrency tax fraud were presented by criminal investigators.

James Daniels, the manager of the cyber crimes unit at the IRS Criminal Investigation division, suggested that companies like Apple, Google, and Microsoft should consider releasing the complete download history of their applications when requested for investigations. Furthermore, social media platforms like Facebook and Twitter should also search for cryptocurrency-related information mentioned by users and vendors accepting Bitcoin.

Daniels wrote:

We should explore the functionality of each application to determine if the app is capable of transmitting or otherwise facilitating Bitcoin transactions, and if so, whether the app is limited to general peer-to-peer transactions or also allows transactions with cryptocurrencies.

If the subject of an investigation appears to own Bitcoin, these companies could subpoena users' "any identifying information," including any cryptocurrency balances, wallet addresses, as well as login times and information, communication, and transaction details.

However, Daniels acknowledged that the reliability of this approach still needs to be "thoroughly tested." Therefore, unless absolutely necessary, it may not be advised to issue subpoenas requesting companies to provide records.

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