The Biden administration’s proposal to catch tax evaders extends to the world of cryptocurrencies, which saw the U.S. Internal Revenue Service add a line on cryptography to the individual return form in 2020.
The U.S. Treasury said the Biden administration’s proposal to strengthen tax compliance includes a requirement for transfers of at least $ 10,000 in cryptocurrency to be reported to the Internal Revenue Service.
“As with cash transactions, companies that receive cryptocurrencies with a fair market value of more than $ 10,000 would also be reported,” the Treasury Department said in a report on tax enforcement proposals published Thursday.
The Treasury said full reporting is needed “to minimize incentives and the opportunity to change revenue from the new information reporting regime.” It was noted that cryptocurrency is a small part of current business transactions.
Bitcoin bounced back from Wednesday’s defeat in the IRS announcement, which shaved about $ 3,000 from the token price. It traded 3% closer to $ 39,000 at 12:33 in New York. Shares linked to cryptocurrencies such as Coinbase and MicroStrategy also invested their profits.
The IRS in 2020 added a line on cryptocurrency to Form 1040, the individual tax return, in an effort to gain more visibility on virtual currency transactions.
President Joe Biden’s administration is also asking banks to report on account flows to help increase compliance with tax payments.
“Cryptocurrency already presents a major detection problem in facilitating illegal activity, including tax evasion,” the Treasury said.