IRS Seizes $12B in Cryptocurrencies Last Year on Behalf of Tax Evaders

In 2016, the IRS seized $3.5 billion in cryptocurrencies on the behalf of tax evaders.

That was just the start. Last year alone, the IRS seized $12 billion, agency officials said Thursday.

“We’re in that space of being the middlemen,” Tax Commissioner Charles Rettig said.

Rettig, who called crypto-asset seizures unprecedented, said the agency hopes to have “virtually zero” crypto-assets seized under existing laws by the end of next year.

“We want to get to a steady state,” he said.

Bitcoin is still the number one target of the IRS, a need the agency is trying to address with numerous rulemakings, the commissioner said.

“We want to address the environment where people have the incentive to not declare and act in a manner that is not in the best interest of society,” he said.

Rettig’s comments came on the heels of legislation approved last month by the House that would roll back a policy that the IRS described as too intrusive and costly.

The bill, the Stop Tax Haven Abuse Act of 2019, was passed by a 237-184 vote. It awaits Senate consideration.

Some privacy advocates, however, have objected to new court processes that provide authorities with broad new powers to seize non-U.S. assets, including bitcoin.

“I think it’s really important to slow down and clean up law enforcement abuses, and I think that should apply, particularly in the field of cyber crime,” John P. Holdren, a Harvard policy fellow and former President Obama’s chief science advisor, said in a hearing of the House Financial Services Committee on Thursday.

In October, President Trump tasked both the Treasury Department and the IRS with working on rulemaking to repeal the Obama-era ban on such seizures.

Rettig praised the White House this week for including their proposals in the 2019 budget request.

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The Associated Press contributed to this report.

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