The US Treasury Department said Thursday that any cryptocurrency transfer valued at $10,000 or more would be required to report to the IRS.
“Cryptocurrency has already become a significant identity problem by facilitating widespread illegal activity, including tax evasion,” the agency said in a new report on tax compliance proposals.
“That’s why the president’s proposal includes additional resources for the IRS to address the development of cryptocurrency.”
The Treasury report states that even though cryptocurrency transactions are a small fraction of business transactions in the US, the need to report large cryptocurrency transactions “reduces the incentive and opportunity to transfer income from new information reporting arrangements” will gain help in.”
According to the report, “At the root of these proposals is a commitment to revive tax enforcement.” “Working to close the tax gap reflects a commitment to ending our two-tiered tax system, one where most American employees pay their full obligations, but those on higher incomes who earn income from opaque sources: often don’t. “
The Treasury Department’s plan outlined several policies aimed at increasing tax enforcement, including new reporting requirements and a major increase for the IRS’ budget, in addition to the new cryptocurrency proposal.
The Treasury Department’s Office of Tax Analysis estimated that the proposed updates would raise an extra $700 billion in tax revenue over the next 10 years and could fetch up to $1.6 trillion over the next decade.
But several changes proposed by the Biden administration in the report would require congressional approval.