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Rewarding Tipsters Through Whistleblower Programs and False Claims Acts Increases the Likelihood of Cryptocurrency Tax Enforcement  

Author:  Carlos F. Ortiz.; Elizabeth Ann Smith.; Nicholas C. Mowbray.; Christina O. Gotsis.; Kayley B. Sullivan.

Source: Volume 39, Number 04, Summer 2022 , pp.39-43(5)

Journal of Taxation of Investments

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Taxpayers could be criminally and civilly liable under state False Claims Acts for underreporting income linked to virtual currency. While the federal False Claims Act explicitly excludes tax cases, the Internal Revenue Service and the Department of Justice have tools aimed specifically at addressing tax fraud and tax avoidance. The Joint Chiefs of Global Tax Enforcement has similarly launched coordinated information sharing efforts to target taxpayers who skirt global tax laws and is contemplating adopting a whistleblower program to boost its own cryptocurrency enforcement efforts. The authors review the current regulatory landscape and next steps.

Keywords: whistleblower(s), cryptocurrency, crypto, False Claims Act, enforcement, Operation Hidden Treasure, digital asset transfer reporting requirements

Affiliations:  1: BakerHostetler; 2: BakerHostetler; 3: BakerHostetler; 4: BakerHostetler; 5: BakerHostetler.

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