President Joe Biden’s administration has proposed requiring cryptocurrency firms to notify the IRS of digital asset transactions over $ 10,000.
The US Treasury Department released a report outlining tax compliance initiatives to close the tax gap. We are talking about the difference between the estimated amounts of taxes and those actually received.
According to the US Treasury Department, in 2019 the state treasury “lost” $ 600 billion. If this problem is not dealt with, in the next decade this figure will be about $ 7 trillion. To combat tax evasion, it has been proposed, among other measures, that firms provide the IRS with information on all digital asset transactions in excess of $ 10,000.
The Biden administration is concerned that cryptocurrency transactions are difficult to track. This contributes to illegal activities and tax defaults. This year, the cryptocurrency market has reached the $ 2 trillion mark, so it needs to be monitored with special attention, the Finance Ministry said in a report. The regulator assumes that the number of cryptocurrency transactions will only increase in the coming years.
The authors of the document emphasized that there are many ways to avoid paying taxes, and cryptocurrencies are one of them, as the IRS is slowly adopting the latest technologies. The IRS uses outdated systems and cannot take full advantage of modern solutions due to limited resources. Coin Center’s Communications Director, Neeraj K. Agrawal, said:
“Equality of cryptocurrencies with fiat currencies is the best scenario. Crypto assets work like cash, so it’s no surprise that they will soon be treated like regular money. ”
Last week, the IRS said it would confiscate digital currencies from tax-backed traders. In addition, the agency has partnered with TaxBit to analyze cryptocurrency transactions and audit tax returns.
