IRS secures first crypto tax fraud conviction, setting legal precedent

For the first time, the IRS successfully continued a case of tax fraud involving only the crypto.

The US Internal Revenue Service won a major victory, fixing a legal precedent in the fight against tax fraud linked to the crypto. In December 2024, Frank Richard Ahlgren III was sentenced to two years in prison and sentenced to a fine of $ 1.1 million for having escaped taxes on crypto sales. In a January 27 blogThe Chainalysis blockchain analysis company said that the decision marks the first time that the tax guard dog obtained a conviction for tax fraud only involving digital assets.

“Beyond the IRS, the case also represents an important victory for the Ministry of Justice and Justice worldwide.”

Chain-analysis

The case is linked to Ahlgren buying a house of $ 4 million in Park City, Utah, using the benefits of its bitcoin (BTC) Sales. The company whose headquarters are New York says that Ahlgren’s methods were quite elaborate: it sold millions in BTC using tools like Coinjoin mixers, a Wasabi portfolio, Peer-to-Peer services and even Structured cash deposits to hide the profits. He also adjusted his tax declarations to show a value lower than his crypto.

However, investigators have always found Ahlgren’s cryptographic transactions on several wallets and exchanges. By chain analysis, its wealth came from a 2015 purchase when it bought 1,366 BTC for around $ 676,170.

“Although Hlgren has thwarted the authorities for a certain time by carrying out calculations, his conviction and his conviction illustrate how chain tax evasion is traceable and has real consequences.”

Chain-analysis

Meanwhile, Senator Ted Cruz of Texas is preparing to challenge a new rule of the crypto IRS using the Congress Review Law. The rule forces the exchanges of decentralized crypto to collect customer information, such as names and addresses, and send tax forms to users.

Like crypto.News reported earlierCruz, as well as the Senators Cynthia Lummis, Bill Hagerty and Tim Sheehy, push to repeal what the Republicans call the “midnight rules” of the Biden administration. These regulations were finalized at the end of last year and the arc gives the congress until mid-May to cancel them. The CRA allows resolutions to bypass the Senate filibusers, requiring only majority votes in the two chambers to pass.