With passing weeks, we are starting to get a sense of what Uncle Sam really feels about Non-Fungible Tokens (NFTs).
A top special agent from the Internal Revenue Service (IRS) Los Angeles criminal investigations field office, said that they think crypto and NFTs are indeed the future, but the fraud manifesting there is simply overwhelming.
Ryan Korner was speaking at a virtual event held on Tuesday by the USC Gould School of Law.
“We’re just seeing mountains and mountains of fraud in this area,” he revealed.
He said that while there are many useful uses for crypto, the digital assets have gone far and beyond payments and trading and are now a preferred tool by fraudsters, money launderers, tax evaders and other criminals.
Korner revealed that the IRS is actively training its agents on crypto and NFTs, and the existing regulations. This is an admission that the government believes that this will be the future, or a big part of it.
He added that the IRS was collaborating with other federal agencies such as the justice department, to ensure that ‘everyone was on the same page’.
In 2021 alone, the IRS seized $3.5 billion worth of cryptocurrencies linked to financial crimes. They ended the year with 80 cases in its inventory.
As NFTs get more mainstream, the IRS will increasingly have more tax evasion cases on its hands, either from willful tax evaders or just ignorant participants.