IRS seeks statutory authority to collect info on cryptocurrency transfers
The IRS is seeking clear statutory authority to collect information on cryptocurrency transfers. The Biden administration has targeted crypto trading for capital gains tax collections. The administration’s fiscal 2022 revenue proposals include a requirement that cryptocurrency transfers of $10,000 or more be reported to the IRS. Reporting shall be done in a manner similar to banks reporting cash transfers of that amount and brokers report securities transactions to the IRS.
Commenting on the proposal, the U.S. Internal Revenue Service Commissioner Charles Rettig said that Congress needs to provide clear statutory authority for IRS to collect information on cryptocurrency transfers.
Rettig told the Senate Finance Committee that cryptocurrency market capitalization is over $2 trillion, and more than 8600 crypto exchanges are operating worldwide.
By design, most crypto virtual currencies are designed to stay off the radar screen, so we will be challenged right now.”
As per estimates, massive profits up to $1 trillion are escaping the IRS. This can be safely attributed to the design of cryptocurrencies, which guarantee anonymity. This is the reason why crypto is in demand and malicious actors including ransomware operators are demanding cryptocurrencies.
Bitcoin tumbling down
Following the proposal, the Treasury has also proposed that the current $10,000 ceiling be reduced to $600. Although Rettig said that he did not advocate for the proposal, but said that the IRS wants to concentrate on higher-wealth individuals who are more prone to tax evasion.
After Rettig’s comments calling for authority to collect data on crypto transfers, Bitcoin fell to a three-week low. It is now operating at around $32,000, half from it’s peak of $65,000 in April this year.
Do subscribe to our Telegram channel for more resources and discussions on technology law and news. To receive weekly updates, don’t forget to subscribe to our Newsletter.
You can also follow us on Instagram, Facebook, LinkedIn, and Twitter for frequent updates and news flashes about #technologylaw.