The US Treasury Department announces reporting requirements for cryptocurrencies
On May 20, 2021, the US Treasury Department announced a proposal that every cryptocurrency transaction of $ 10,000 or more must be reported to the Internal Review Service (“IRS”). Complementing President Biden’s American Families Plan, which focuses on investing in American children and families, the Treasury Department has introduced reporting requirements for cryptocurrencies and other tax compliance initiatives in a new report titled The American Families Plan Tax Compliance Agenda ( the “Report”) is described in detail. .
In the report, the Ministry of Finance states that “[c]Rypto currency already poses a significant identification problem as it broadly facilitates illegal activities, including tax evasion. . . . Although cryptocurrency transactions represent a relatively small fraction of business income today, they are likely to grow in importance over the next decade, especially given a widespread financial account reporting system. “The IRS has also identified cryptocurrency transactions as an enforcement priority and recently included cryptocurrency reports on the individual tax return, Form 1040.
Although the report does not fully describe the requirements for reporting on cryptocurrencies, it does indicate that cryptocurrencies, cryptoasset exchange accounts, and payment service accounts that accept cryptocurrencies would be covered. Similar to cash transactions of the same amount, companies receiving crypto assets with a fair market value of more than USD 10,000 would have to report this. However, many of the proposals discussed in the report require the approval of Congress.
Read the report.