IRS creates digital panoramic jails: Real-time encryption tracking to ensure tax compliance

The IRS is developing a near-real-time blockchain monitoring system to track cryptocurrency transactions to ensure tax compliance, aiming to spot underreporting revenues and narrow the $600 billion annual tax gap. The system will monitor Bitcoin and Ethereum transactions, identify U.S. taxpayers’ wallets and cross-reference data in real time. Despite privacy concerns and criticism of potential overpowering behavior, the IRS argued that the move is necessary for modern law enforcement and plans to widely promote the system in the next fiscal year.