Though they've had to make some modifications, IRS criminal field agents have been able to execute their responsibilities during the pandemic, James Lee, chief of criminal investigation, said during a panel session of the Federal Bar Association's annual tax law conference, held online. Agents' operations include executing search warrants and making arrests, among other activities.
"The only real thing that's changed [regarding operations] is just outfitting our special agents with the equipment, the PPE that they need to do their job," Lee said, referring to personal protective equipment.
Lee took the reins of the division when his predecessor, Don Fort, retired in September.
The IRS announced in March 2020 that in light of the pandemic, it would carry out a People First Initiative, which temporarily relaxed certain payment guidelines and compliance activities.
As part of that initiative, which lasted from April 1 through July 15, IRS field officers generally did not initiate seizures of property, liens or levies, but were instructed to continue pursuing high-income individuals who had not filed. IRS Commissioner Chuck Rettig later said that the agency would begin to gradually ramp up its enforcement activities once that initiative ended.
Also speaking during the panel, Carolyn Schenck, counsel with the IRS, said the agency is actively working with its vendors to identify patterns or signatures that may be helpful in identifying cryptocurrency users who may have attempted to avoid paying their tax liabilities.
"One of the things that we are trying to determine is whether or not there is a tax evasion signature out there in connection with these types of transactions," Schenck said, adding that the agency is looking to learn lessons from enforcement areas, like money laundering and offshore tax evasion.
"Perhaps it's like we've seen it offshore the use of nominees or alter egos shell [corporations]," she said. "Maybe here it's the use of excessive on and off the chain, tumblers, mixers, who knows? That's an area that we're looking into now with some of our very sophisticated vendors."
Tumblers or mixers are mechanisms by which the disbursement and receipt of cryptocurrencies may be cloaked in a certain amount of privacy.
In January, an IRS official said that while the agency recognizes the need to produce additional cryptocurrency guidance, it has instead been focused recently on releasing regulations related to the coronavirus pandemic.
--Editing by Vincent Sherry.
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