As a number of people who make use of crypto continues to grow around the globe, the need for proper regulations and tools for the reporting and handling of crypto-related tax grows as well. Many countries around the world have been seen to expand on their existing tax code and punishments are being meted out for the nondisclosure of crypto assets and crypto tax evasion. However, because cryptocurrency exists in a virtual online space, it is not necessarily as easy to track as fiat currency and this has proved to be a challenge for some world governments as they expand on their crypto tax code.
Now, the British tax agency has openly invited contractors to provide a tool that will assist the agency in the tracking of crypto transactions and the prevention of crypto tax evasion and crime.
The Taxman Calls
The announcement in question was placed on January 17, 2020, on the website for the British Tax Agency and is worth about £100,000. The contract calls for a tool that will make use of cluster analysis to help match crypto transactions to service providers and better aid the agency.
While they are free online tools already available, the agency believes a commercial tool will aid them better and allow them to close all the currently existing loopholes that allow criminal activity to thrive and will bring them a step closer to an airtight crypto tax code. The agency is interested in tracking some of the most popular cryptocurrencies such as bitcoin but is also paying attention to privacy coins such as Monero as these, by their very design, are nearly impossible to track and they have become a tool of choice for those who are engaging in criminal activity.
Over the years, the agency has had to battle the issue of fraud activities within the country. These range from phishing emails that target vulnerable individuals to denial of service. By making use of technology that targets cryptocurrency transactions, the agency hopes to further combat this menace and hopefully put a stop to it.