US, UK Lead 5-Nation Alliance to Combat Cryptocurrency Tax Crimes - Bitcoin and Altcoins News

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July 3, 2018

US, UK Lead 5-Nation Alliance to Combat Cryptocurrency Tax Crimes

The tax authorities of the United States and the United Kingdom have signed on to lead an international alliance designed to combat transnational financial crimes, including those involving cryptocurrency.

J5 Aims to Combat Cryptocurrency Financial Crimes

Announced on Tuesday, the five-member Joint Chiefs of Global Tax Enforcement (J5) is a partnership between the Australian Criminal Intelligence Commission (ACIC) and Australian Taxation Office (ATO), the Canada Revenue Agency (CRA), the Fiscale Inlichtingen- en Opsporingsdienst (FIOD) in the Netherlands, the U.K.’s HM Revenue & Customs (HMRC), and the U.S. Internal Revenue Service Criminal Investigation (IRS-CI).
According to the announcement, the five member governments will work together to combat cross-border financial crimes such as money laundering by coordinating investigations and enforcement actions. Central among the J5’s concerns is the growing proliferation of cryptocurrencies, which show no respect for national borders.
From the J5’s website:
“We will…collaborate internationally to reduce the growing threat to tax administrations posed by cryptocurrencies and cybercrime and to make the most of data and technology.”
“The formation of the J5 demonstrates the serious commitment of governments around the globe in enhancing international cooperation in fighting serious international tax and financial crimes, money laundering, and cybercrime through the use of cryptocurrencies, added Johanne Charbonneau, director general of the Canada Revenue Agency. “Our collective efforts and experience will be shared to jointly identify and address the increasingly sophisticated and global schemes and the professional enablers that facilitate such schemes.”

Tax Agencies Turn Eye to Cryptocurrency Investors

IRS bitcoin
The J5 comprises tax agencies from five countries, including the U.S. Internal Revenue Service (IRS).
Tax agencies across the world have made cryptocurrencies a key focus in recent months, largely because many early investors took profits during and after the 2017 bull run — profits they have not always been quick to report to tax collectors.
In the U.S., for instance, the IRS has contracted with blockchain analytics firms to identify cryptocurrency investors who fail to report and pay taxes on their trading profits. The agency also experienced a partial victory when it took cryptocurrency exchange operator Coinbase to court in an attempt to force it to hand over customer data.
And though cryptocurrency accounts for a minuscule amount of global financial crimes, law enforcement agencies are concerned that terrorists and other criminals will increasingly use this nascent technology to finance their operations and secure their assets against government seizure.
This isn’t the first attempt at international coordination to combat the perceived threat of cryptocurrencies. As CCN reported, this asset class featured prominently on the agenda of the G20’s April meeting, though this collaboration has yet to produce the coordinated regulatory framework for which several nations have called. This level of coordination, FIOD General Director Hans van der Vlist, is what makes the J5 unique.
“The unique thing about the J5 is the operational collaboration between five countries on tackling professional enablers that facilitate offshore tax crime, cybercrime and the threat of cryptocurrencies to tax administrations, as well as making best use of internationally available data and technology,” Vlist said.
Images from Shutterstock

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