During a meeting yesterday the U.S. Treasury Department announced for the first time that any cryptocurrency transaction worth $10,000 or more will need to be reported to the IRS. Throughout the report on tax compliance proposals, the agency said cryptocurrency presents a significant detection problem by facilitating illegal activity generally, including tax evasion.
In reaction to this, the President’s proposal includes additional resources to help the IRS respond to the growth of crypto assets. Although cryptocurrency transactions constitute a small fraction of business transactions in the US, the Treasury said companies should be required to report large cryptocurrency transactions. This requirement would help “minimize the incentives for people to shift income out of the new reporting regime.”
Tax enforcement has been one of the main goals of the Treasury Department plan, which was proposed by the Department of the Treasury. This plan included new reporting requirements as well as a big increase in tax revenue for the IRS. A fundamental commitment to reviving enforcement is noted in the report. “Aware that one-time increases in taxes burden high earners with unusual obligations,” the report states.
According to the Treasury Department’s Office of Tax Analysis, the proposed changes are estimated to generate between $700 billion and $1.6 trillion in revenue over ten years. Several of the proposed changes require Congress’ approval.