Joe Biden’s administration proposal to strengthen tax compliance will require reports on all transfers of at least US$10,000 worth of cryptocurrency to the Internal Revenue Service.
The U.S. Treasury said in a tax-enforcement report that the same context that applies to cash transactions, and businesses that receive crypto assets with a fair-market value of more than US$10,000 would also be reported.
According to the Treasury, cryptocurrency is a small share of business transactions which stand as potential methods to hide income from the government, comprehensive reporting is necessary “to minimize the incentives and opportunity to shift income out of the new information reporting regime.”
Kristin Smith, Executive Director of the Blockchain Association Trade Group made it clear that for those who believe we should try to keep crypto on par with how cash is treated – this stands as answer to that.
Cryptocurrency transaction is likely to rise in the next decade and at the moment, the IRS has no independent means of verifying crypto transactions which opens the door to an even wider tax gap between taxes owed and paid.