Brazil's IRS identifies 25,000 Bitcoin investors with unreported holdings
Using artificial intelligence, the IRS was able to discover around $200 million in Bitcoin holdings that weren’t reported last year.
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The Brazilian Federal Revenue Service announced on Thursday that it has identified 25,126 individuals who failed to declare their Bitcoin (BTC) holdings on their 2022 income tax returns. Local news outlet G1 reported that these individuals each held a minimum of 0.05 BTC, equivalent to approximately $2,000 based on current market values.
The discovery, made possible through a blend of conventional investigative methods and artificial intelligence, revealed around $200 million in unreported investments within the cryptocurrency domain. Under Brazilian tax law, anyone required to file an income tax return in 2023 and possessing crypto assets must report these holdings, regardless of their value.
In light of these revelations, the IRS is considering initiatives to facilitate voluntary compliance, encouraging taxpayers to self-correct their previously filed returns. This effort aims to enhance compliance without resorting to the typical fines associated with tax audits.
Affected taxpayers might need to file amended returns for 2023 to rectify their reporting, thereby avoiding potential audits and penalties.
Moreover, the IRS has noted a substantial increase in transactions involving stablecoins. According to Brazil’s IRS latest reports on crypto transactions, over $3 billion in trading volume can be attributed to stablecoins, which is over 80% of the total amount transacted using crypto.