The U.S. Department of the Treasury has announced measures to crack down on tax evasion involving cryptocurrencies as part of President Joe Biden’s proposed tax compliance measures. Among the measures is a requirement for businesses that receive crypto assets with a fair market value of more than $10,000 to report transactions to the IRS.
Treasury Proposes Measures to Crack Down on Tax Evasion via Cryptocurrency
The U.S. Department of the Treasury published a report on Thusday entitled “The American Families Plan Tax Compliance Agenda.” The report outlines President Joe Biden’s proposed tax compliance measures.
Among the proposals is “Increased information reporting.” The report explains that “The President’s proposal requires information reporting on financial accounts to increase the visibility of gross receipts and expenses to the IRS,” adding that “The reporting regime would also cover foreign financial institutions and crypto asset exchanges and custodians.”
The report notes that “Another significant concern is virtual currencies, which have grown to $2 trillion in market capitalization,” emphasizing:
Cryptocurrency already poses a significant detection problem by facilitating illegal activity broadly including tax evasion.
“This is why the President’s proposal includes additional resources for the IRS to address the growth of cryptoassets,” the Treasury report continues. “Despite constituting a relatively small portion of business income today, cryptocurrency transactions are likely to rise in importance in the next decade, especially in the presence of a broad-based financial account reporting regime.”
Emphasizing that “Within the context of the new financial account reporting regime, cryptocurrencies and cryptoasset exchange accounts and payment service accounts that accept cryptocurrencies would be covered,” the proposal details:
As with cash transactions, businesses that receive cryptoassets with a fair market value of more than $10,000 would also be reported on.
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