Big Brother is watching. — And he wants your Bitcoin. In the most terrifying cryptocurrency news story of the year to date, a new IRS Bitcoin tracking initiative is planning to subpoena Apple, Google, and Microsoft. The reason? The IRS wants to know what kind of apps you download. More specifically, they want to know if you have ever downloaded a cryptocurrency wallet application.
IRS Bitcoin Tracking is Totalitarian – But It’s Happening
Details of new IRS Bitcoin tracking plans were revealed on July 8th by the Crypto Tax Girl.
Uncovered in an official IRS training presentation, methods IRS officials plan to use to identify cryptocurrency users are a thing of privacy nightmares.
- The IRS suggests serving Grand Jury Subpoenas with Big-Tech companies to identify individuals who have previously downloaded cryptocurrency wallet apps.
- IRS agents will attempt to identify instances of cryptocurrency tax fraud, by speaking to friends and relatives of suspected cryptocurrency users.
- The IRS plans to monitor the social media accounts of suspected cryptocurrency users.
In all cases, the IRS also advises against making suspected cryptocurrency users aware of investigations. If this were to happen, cryptocurrency wallet holdings may prove harder to seize if investigations are successful.
The IRS Plans to Spy on Suspected Crypto User Bank Accounts
As well as serving Grand Jury Subpoenas with Big-Tech companies, the IRS plans to access personal banking records. Banks, PayPal, and credit card providers will all be asked to disclose details of possible cryptocurrency purchases made by their customers online. Vendors of goods and services who accept cryptocurrency payments may also have past transaction records subpoenaed. This way, IRS Bitcoin tracking will be able to identify cryptocurrency users who might not use traditional banking and/or fiat cash payment methods.
The End Goal is to Grab Peoples Bitcoin
New IRS Bitcoin tracking tactics are essentially an attempt to shake down anyone suspected of using cryptocurrency.
The first and foremost objective of investigators is to identify the public key of a suspected Bitcoin users wallet. This is because looking up wallet balances on the blockchain is the only way for the IRS to tell if a suspect attempts to hide cryptocurrency they own after the IRS issues seizure notices.
IRS Bitcoin Tracking Privacy Implications
The most worrying detail from July’s leaked IRS Bitcoin tracking presentation concerns a paragraph which states that Subpoenas may be served against web wallet providers directly. More specifically, a paragraph which advises that while this is possible, investigators should refrain from taking this course of action for the moment. This is because this method of evidence gathering is still being tested.
The reliability of this method, both in record retention and non‐notification of the customer, has yet to be extensively tested. As such, it may not be advised to send a Subpoena for records if not critically necessary.
Naturally, this implies that previously mentioned IRS Bitcoin tracking methods do already benefit from extensive testing.
That’s right. If you are reading this and maintain a cryptocurrency balance of any kind, the IRS may have already subpoenaed Google and Apple for details concerning your past app store downloads. The only question is, have you got anything to hide?
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