The IRS finally wrapped its head around the cryptocurrency ecosystem, and now it’s looking to squeeze every tax dollar out of it and thwart money laundering operations. To that end, Uncle Sam recently turned its attention towards Bitcoin ATMs.
According to Bloomberg Law, the Internal Revenue Service has re-calibrated its focus to include Bitcoin ATMs around the world. Are people using them to launder money? Hide gains? IRS agents are probing these questions.
What are Bitcoin ATMs?
Like standard ATMs, crypto ones cough up currency, but in reverse. Users insert fiat money, like dollars, and get crypto back. Authorities are highly skeptical of Bitcoin ATMs because of their money-laundering potential and usefulness in running unregistered exchanges.
“If You Can Walk In and Get Bitcoin Out”
When asked about the agency’s focus, John Fort, the IRS criminal investigation chief, explained: “If you can walk in, put cash in and get Bitcoin out, obviously we’re interested potentially in the person using the kiosk and what the source of the funds is, but also in the operators of the kiosks.”
Tax Evasion and Anti-Money Laundering
Fort explained that the agency’s newfound focus is primarily related to anti-money laundering efforts. “They’re required to abide by the same know-your-customer, anti-money laundering regulations,” he added, “and we believe some have varying levels of adherence to those regulations.”
Currently, about 6,000 Bitcoin ATMs are scattered around the world — with roughly 4,000 in the United States — and the IRS wants data from them all. “We have concern that as things tighten up here in the US, that we are pushing people to foreign exchanges,” said Fort.
Consult with a Bitcoin Tax Lawyer
The Gordon Law Group works with individuals and businesses on cryptocurrency tax matters. We develop ideal tax positions, facilitate compliant ICOs, and more. Get in touch today and discover why our team of crypto lawyers has earned a 10-out-of-10 rating.