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U.S. Treasury Calls For IRS Reporting Of $10K+ Crypto Transfers
Continued political buzz is abundant lately around crypto, and today is no exception. In a initial report from Bloomberg this morning, the U.S. Treasury has shared intent to require businesses, and likely individuals as well, that transfer $10,000 USD and above in crypto to report the transactions to the IRS. The move is part of a broader plan from the Biden administration to strengthen tax compliance.
The Treasury Talk
The information was sourced from a Treasury report titled ‘The American Families Plan Tax Compliance Agenda‘. “As with cash transactions, businesses that receive cryptoassets with a fair market value of more than USD 10,000 would also be reported on. Although cryptocurrency is a small share of current business transactions, such comprehensive reporting is necessary to minimize the incentives and opportunity to shift income out of the new information reporting regime”, the report stated.
Interestingly, the report specifically cited both cash and crypto as being viable shields from tax reporting; specifically, the report even describes crypto as posing a “significant detection problem by facilitating illegal activity broadly including tax evasion”. The report goes on to acknowledge that crypto transactions “are likely to rise in importance in the next decade”.
The report is likely to tie with IRS Form 8300, which requires individuals, companies, corporations, partnerships, trusts, estates and the like to report cash payments of over $10,000 USD.
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Continued investment in broader crypto has the federal government paying attention | Source: CRYPTOCAP - TOTAL on TradingView.com
Flurry Of Federal Chatter
The U.S. government has had increasing amounts of public-facing commentary. The Treasury’s commentary seems to ring a bit inconsistent from broader messages. Today’s report comes after two Federal Reserve policymakers stated earlier this week that cryptocurrency does not have a “reach into the economy that has systemic implications” for the Fed. St. Louis Federal Reserve President James Bullard and Atlanta Federal Reserve President Raphael Bostic both noted the volatility of crypto being a known trait, with Bostic adding that crypto was not “something I really incorporate very much into how I think about where our policy should be”.
The U.S. isn’t alone in the public discussion, either. Norway’s central bank has expressed concern that crypto’s volatility could be concerning for their banking system, and of course China’s potential rigid stance of crypto, with mining especially at the forefront, has consistently been a point of conversation in the space.
Of course, institutions have held a variety of views globally as well. Wells Fargo has warmed up to crypto investments, along with other major U.S. institutions, however the Bank of Canada recently stated that volatility in cryptocurrency assets is an emerging vulnerability for the country’s financial system.