The Potential for CBDC Clawbacks and AI Transaction Tracking in Tax Enforcement

Introduction:
As the world explores the possibility of Central Bank Digital Currencies (CBDCs), there are important considerations to be made regarding their potential impact on tax enforcement. CBDCs, with their inherent features and technological capabilities, could provide governments with enhanced tools for tracking transactions and enforcing tax obligations. This article explores the potential implications of CBDC clawbacks, AI transaction tracking, and the utilization of biometric data in tax enforcement efforts, particularly in relation to exchanges of digital assets for property, goods, or services. (https://www.irs.gov/businesses/small-businesses-self-employed/digital-assets)

CBDC Clawbacks:
One potential use case of a CBDC is the implementation of clawbacks, which involve the retrieval of funds or assets previously distributed. In the context of CBDCs, clawbacks could be utilized to address tax evasion or non-compliance with tax obligations. With the transparent and traceable nature of CBDC transactions, authorities may have the ability to identify transactions that raise red flags and initiate clawback measures to recover unpaid taxes or enforce compliance.

AI Transaction Tracking and Capital Gains Tax:
The integration of artificial intelligence (AI) in transaction tracking…