Crypto Users: The IRS Is Watching You

The IRS has been stepping up its game in tracking crypto investors. It's not just about big traders anymore. The agency is now looking at a wider group of people who use crypto. They're using special tools to follow crypto transactions as they happen. The IRS has been asking big crypto companies for user data. They've even gone to court to get this information. This has led to a lot of money being seized. In one year, they got $3. 5 billion from crypto alone. That's a lot of money! The IRS uses something called "John Doe summonses" to get this data. They have to meet certain rules to get these summonses. But these rules aren't very strict. So, it's easy for the IRS to get the information they want. The IRS is also using special software to look at crypto transactions. They combine this with data from exchanges to build a picture of people's finances. This helps them find people who might not be following the tax rules. Some experts say this is a big change. Before, people had to choose to report their crypto taxes. Now, the IRS is making it so more people have to report. This could lead to more people following the rules, but it could also cause problems. There are some issues with this approach. For example, the forms that exchanges use to report data might not be accurate. This could lead to people getting notices from the IRS even if they did everything right. Privacy advocates are not happy about this. They say the IRS is going too far. They worry that this could lead to too much surveillance of people's financial lives. But for now, the IRS seems to be moving forward with its plans.