A recent report by the Treasury Inspector General for Tax Administration (TIGTA) uncovered significant weaknesses in how the IRS Criminal Investigation (IRS-CI) unit seizes and manages crypto and other digital assets.  

Specifically, TIGTA identified the following:  

• Seizure memoranda were not completed for all seized digital assets, as required.  

• Required information was not always included in completed seizure memorandums.  

• Deficiencies in managing and safeguarding seized digital assets.  

• Inaccuracies associated with tracking some seized digital assets. 

It’s clear to AIA that the IRS has crypto in its crosshairs. The IRS is now taking targeted actions against crypto and other digital assets. This comes after the IRS pushed for Coinbase user data, which the Supreme Court rejected. Now, IRS notices to crypto investors are up 750% over the past two months; the agency is not following its protocols. In addition, beyond incomplete paperwork, the report highlighted broader management issues. 

Digital assets are important as they’re becoming a greater part of individual portfolios and have seen tremendous market growth. The IRS needs to follow its own standard operating procedures, seizure memoranda, and established protocols in all dealings with digital assets.  

Read the full report here. 

If you, or someone you know, has experienced a specific IRS abuse and wish to flag the instance for potential inclusion in future Abuses of the Week, contact us with the details at the following email: info@irsaccountability.org.