IRS Taps Palantir To Find 'Highest Value' Audits – Crypto Bros Could Be Next, Says ZeroHedge

• The Internal Revenue Service reportedly deployed Palantir’s data analytics platform to identify high-value audit targets using internal data.
• New reporting rules require major crypto platforms to report users’ gross proceeds to the IRS starting with 2025 data.
• The agency has previously used blockchain analytics and partnerships with firms like Coinbase to detect underreported crypto income.

The Internal Revenue Service (IRS) has reportedly teamed-up with Palantir (PLTR) to flag ‘high-value’ audit targets, a move that could intensify scrutiny on crypto investors, according to ZeroHedge.

The financial outlet said on Wednesday that Palantir’s Selection and Analytic Platform (SNAP) flagged in WIRED’s report could potentially be extended to crypto-related audits as the IRS expands its oversight.

ZeroHedge added that, based on last year’s tax data, major crypto platforms including Coinbase (COIN), Kraken, and PayPal (PYPL) are required to report users’ gross proceeds directly to the IRS through Form 1099-DA, a new reporting requirement for digital asset transactions. The outlet said, “It’s on-chain so they’ll never find it” is not a strategy anymore.”

Form 1099-DA would make crypto audit rules similar to stock-like tax reporting, where the IRS already knows a high value transaction before a user files it.

Crypto Remains A Key Focus For Enforcement

WIRED’s report noted that the IRS has previously explored methods such as contracting with companies like Coinbase to analyze crypto transaction data as part of efforts to improve audit targeting. The report emphasized that SNAP currently works only with the IRS’s internal data and does not yet incorporate external sources such as social media or third-party applications.

ZeroHedge added that the IRS has historically relied on blockchain analytics and publicly available data to detect potential tax discrepancies involving digital assets. As reporting requirements tighten and analytical tools improve, crypto-related underreporting is likely to remain a key focus area for regulators, according to the blog. 

IRS Expands Data-Driven Audit Capabilities

SNAP is designed to analyze fragmented internal IRS datasets and identify cases with the greatest potential for tax recovery, according to Wired’s report. The platform is part of more than $200 million in contracts awarded by the IRS to Palantir since 2014. The system is currently being tested across areas such as clean energy credits, disaster relief claims, and gift taxes, according to the report. 

Palantir's stock was up 0.99% during midday trade on Wednesday. On Stocktwits, retail sentiment around PLTR remained in the ‘bearish’ zone, while chatter around it remained ‘normal’ levels over the past day.

Read also: Ex-PayPal Regulator Becomes Chair Of Fellowship PAC

For updates and corrections, email newsroom[at]stocktwits[dot]com