The U.S. Treasury Department announced Thursday (May 20) that it is requiring cryptocurrency transactions over $10,000 to be reported to the Internal Revenue Service (IRS).
In a tax enforcement recommendation report issued Thursday, the Treasury Department said companies that accept cryptocurrencies as a form of payment are required to report to the IRS if they receive more than $10,000 in cryptocurrency, just as they do for cash transactions.
“Cryptocurrencies already pose a significant issue to be investigated, and it is widely involved in illegal activities, including tax evasion.” The Treasury Department said in a press release.
This is part of the Biden administration’s policy to combat tax evasion, with the White House planning to allocate an additional $80 billion to the IRS to step up efforts to recover taxes from taxpayers involved in tax evasion.
The Treasury Department estimates that tax evasion will reach $7 trillion over the next 10 years, or about 3 percent of U.S. gross domestic product (GDP). The rollout of measures to combat tax evasion is expected to raise $700 billion in tax revenue over 10 years.
“That’s why the President’s proposal includes additional resources for the IRS to address the growth of crypto assets.” “The new financial account reporting system would cover cryptocurrency and crypto-asset exchange accounts as well as accounts for services that accept cryptocurrencies,” the Treasury Department said in a communications release.
“In addition, as with cash transactions, businesses that receive crypto assets with a market value of more than $10,000 will be required to report.” The newsletter release added.
Over the past month, Wall Street analysts have continued to sound the alarm that regulators at the Treasury Department and the Securities and Exchange Commission may soon regulate cryptocurrencies.
Crypto digital currency trading platform Coinbase briefly dipped about $6, narrowing overall intra-day gains to about 3 percent. bitcoin fell back slightly below $40,000, narrowing overall intra-day gains to less than 9 percent, according to Bitstamp data.
Bitcoin had touched an intraday high of $42,589 before the Treasury Department announced restrictions, according to Coindesk quote data.
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