Have you ever asked yourself any questions about the IRS? I have. I know that governmental agencies usually have specifically defined purposes and functions and that they often do not include functions that may be provided by other agencies such as law enforcement and/or security and protection so that they are left to provide for such for themselves on their own if they do so at all. And then I wonder if government agencies, even those tasked with the functions of regulation and law enforcement, always fulfill such obligations? The exact role and nature of the functions of the IRS are a little unclear to me. As an agency of the United States federal government, does it have any functions that protect the public? How exactly does the IRS function to safeguard the economy so that ordinary Americans are guarded from loss or damage caused to the economy as a whole which negatively impact them? Is protection of the economy very broadly, and of citizens more specifically, a function of the IRS? If not, should it be?
With just a tiny bit of online research I found the following:
The mission of the Internal Revenue Service (IRS) is to provide taxpayers with high-quality service to help them understand and meet their tax responsibilities, and to enforce the law with integrity and fairness.
Purpose of the IRS
As a bureau of the Department of the Treasury, the IRS administers and enforces federal tax laws. Established in 1862 during the Civil War to collect the nation’s first income tax, the IRS’s purpose now includes tax collection, taxpayer services, and tax law enforcement. The IRS collected nearly $4.7 trillion in revenue in fiscal year 2023. They assist taxpayers through various resources like forms, publications, and helplines. The agency also enforces tax laws by auditing returns and investigating financial crimes through its Criminal Investigation division.
IRS core mission statement
The IRS’s core mission statement focuses on taxpayer service and law enforcement. They aim to help taxpayers understand their obligations through accessible information and assistance, while also enforcing the tax code fairly to ensure compliance.
Core values
The IRS operates with core values such as integrity, respect, accountability, continuous improvement, and collaboration to guide its mission.
Prior to Trump’s second term, Congress had already taken steps to put cryptocurrency under the umbrella of the treasury department for better or for worse and without, I believe, a full understanding of cryptocurrency or thorough planning, oversight, or protections for its adoption and use within the treasury department. The IRS, under Trump, is incorporating cryptocurrency into its jurisdiction and purview. Since January, while in the office as president of the United States, Trump has invested heavily in cryptocurrency. It has been reported that he and his family have profited by billions of dollars in only a few months. Trump has a vested interest in making sure that cryptocurrency serves his long-term financial goals. Trump does not have direct control of cryptocurrency policy. But he does have control of the agency policy directors who have stepped into the role of serving him unquestioningly and as is true of all of Trump’s administrative personnel, if or when they do not serve him unquestioningly, they will usually find themselves fired from the job immediately. The incorporation of cryptocurrency by the treasury department into its system inherently involves a high degree of potential for conflict of interest and corruption.
So, what is cryptocurrency? Is it money? Is it a component of the market and economy that generates revenue, value, or that supports the economy?
I am not a coder or programmer and I do not understand how this technology is devised and created, or what its original intended purpose was. I don’t know what ideas or concept designs bring forth new computer technology. But computer technology is created and becomes part of our lives even when we know little or nothing about it or how it affects our lives now or how it will or could impact our lives in the future. I say this about cryptocurrency and AI and all technological innovations that instantly enter into our lives and become a part of the free market and present themselves on Wall Street trading floors as entities that are traded and have definite impacts on the economy and thus on all of us.
Not really knowing what cryptocurrency is, after a little researching I have found that:
Cryptocurrency is digital currency that doesn’t require a central bank or financial institution to verify transactions. Instead, this virtual currency is verified and recorded with blockchain technology, creating an unchangeable ledger that tracks trades and the purchase of digital assets.
Cryptocurrency is not a currency in the same way that a “real” or “fiat” currencies like the U.S. dollar because it’s decentralized, not issued by a government or central bank, and generally lacks government backing, insurance, or an established legal tender status. While some people use crypto for payments, many treat it as an investment, and the IRS taxes it as property, not as a currency.
So, what, exactly is a “digital” currency? Is it a real thing? Is it real money that comes from a real bank account and that goes to another real bank account? Or is it a debit that is created on a non-verified, non-centralized bank account by a publicly facing and supposedly transparent and permanent leger through a blockchain? Again, is it real? Are cryptocurrency transactions in fact legitimate, traceable, and verifiable transactions that take place between two real bank accounts using real money? How are two sets of accounts, one regular banking, the other cryptocurrency, balanced, reconciled, and coordinated? Does having two sets of accounts pose any risk for the economy in general? Does having two sets of two different types of accounts create a potential for economic problems? Does a cryptocurrency transaction represent real money that is coming from a real bank account and is going into a real bank account? If that is the case, why use cryptocurrency and why not just use real bank accounts in real banks that use real legal tender and are insured instead? Isn’t the whole idea behind a “digital currency” redundant when the necessary traditional banking services and financial tools that we have always used are already in use in the transactions that we make every day? Why use a system that is redundant and is not needed and is not guaranteed or secure or insured? Is swapping out the protections that we have using a secure and insured banking system for a peer-to-peer closed autonomous system with no such protections a smart thing to do?
The most serious caveat that has been made about the use of cryptocurrency in general is that it is often not used to benignly transfer money, which normally is usually done using traditional banking services and methods, but is used to carry out illicit, nefarious, and criminal activities and as a devise to launder money. Money laundering then leads to increased crime and can confound and compound many law enforcement and judicial activities and issues.
I believe Congress and the treasury department are in the process of determining how to embed and interlink cryptocurrency fully into the IRS. The federal government of the United States seems to be determined to change the status of cryptocurrency and to fully validate it as part of the whole economic system and seems to seek to allow it to remain a sort of autonomous and not adequately regulated or secured part of the banking system.
If it is true that one of the stated purposes of the IRS is “to investigate financial crimes through its Criminal Investigation division” I would think, hope, and expect that any codification of cryptocurrency in the IRS by Congress would ensure protections against potential crimes that could be committed with cryptocurrency and to prevent those from occurring. But that would require that Congress enforce laws, rules and regulations that prevent such crime from occurring.