ON THURSDAY, the U.S treasury department announced that Cryptocurrency exchange and transactions would be required to report information on “Gross inflow and outflows” of money through their account. Any crypto transaction above $10K reports to IRS (Internal Revenue Service).
According to a report from Treasury Department “Want to put a new requirement in place which would make easier for government to see money moving around, including digital currencies.”
The Treasury Department said, “Cryptocurrency already poses a significant detection problem by facilitating illegal activity broadly including tax evasion. This is why the president Proposal includes additional resources for IRS to address the growth of crypt assets”.
The move comes at a time in which US regulators are tracking the movement of cryptocurrencies more closely.
According to the report, IRS collects 99% of taxes due to wages. It is as low as 45% on non-labor income. A discrepancy hugely benefits high earners with “less visible” income sources.
“Cryptocurrency relatively small portion of business income today, cryptocurrency transaction are likely to rise in importance in next decade especially in presence of a broad-based financial account reporting regime,” noted department.
The Treasury report said: “These chances are especially for those in the top end of the income distribution who stay away from taxes through modern methodologies.”
The report details multilayer efforts to bolster IRS enforcement. It would bring approximately $700 billion in tax revenue over the next ten years. Proposed changes, if implemented, would go into effect starting in 2023.
Fed and some other developed economies are still conducting research on what a central bank digital currency would look like. China is moving ahead and is currently piloting a digital version of the yuan. It is planning to ramp up usage before the 2022 Winter Olympics in Beijing.
