Improvements Are Needed to Accurately Track and Safeguard Seized Digital Assets

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Date Issued

Tuesday, July 1, 2025

Submitting OIG

Treasury Inspector General for Tax Administration

Agencies Reviewed/Investigated

Internal Revenue Service

Report Number

2025-IE-R018

Report Type

Inspection / Evaluation

Agency Wide

Yes

Number of Recommendations

Questioned Costs

Funds for Better Use

Report updated under NDAA 5274

Open Recommendations

This report has 6 open recommendations.

Recommendation Number	Significant Recommendation	Recommended Questioned Costs	Recommended Funds for Better Use
1	No	$0	$0
The Chief, Criminal Investigation, should ensure that the CIS and SME are familiar with seizure memorandum requirements. This includes ensuring that seizure memorandums are completed with key activity information; and enforcing, monitoring, and adhering to guidelines.
2	No	$0	$0
The Chief, Criminal Investigation, should ensure that steps are taken to preserve the form of the digital asset seized. Policies and procedures should be implemented to restore a seized digital asset to its original currency type in the event the asset is converted to a different digital currency type to execute the seizure.
3	No	$0	$0
The Chief, Criminal Investigation, should implement policies and procedures to ensure that cases are appropriately transferred and adhere to the evidentiary chain of custody requirements when a special agent leaves the IRS.
4	No	$0	$0
The Chief, Criminal Investigation, should establish an inventory system that can manage seized digital assets to include accurately tracking the quantity of digital assets to the fractional digit, and ensure that there is consistent treatment of all seized digital assets within its tracking system.
5	No	$0	$0
The Chief, Criminal Investigation, should update the Pre-Seizure Planning of Digital Assets and the Custody and Storage of Seized Assets guidelines to accurately reflect the processes to follow from seizure to disposition of seized digital assets.
6	No	$0	$0
The Chief, Criminal Investigation, should update internal guidelines to include time frame requirements for preparing the seizure memorandum and updating records in AFTRAK.