The U.S. Treasury Department is targeting cryptocurrency transactions worth $10.000 or more and is considering requiring companies to report them to the IRS.
The United States is moving forward with its tax collection plan cryptocurrencies, . The Treasury Department, the body in charge of managing the country's public treasury, published its “Tax Compliance Agenda” recently, where it proposes requiring cryptocurrency service companies to report transactions involving crypto assets, the amounts of which are equal to or greater than $10.000.
According to releaseThe reporting regime that companies must comply with covers foreign financial institutions that offer cryptocurrency services as well as digital asset exchanges and custodians in the country.
Companies will be required to report cryptocurrency transactions to the Internal Revenue Service (IRS) to ensure that the agency can address the rapid growth that the digital industry is currently experiencing. The Treasury acknowledged that cryptocurrency transactions still represent a “small portion” of the current financial system, but notes that their rise and adoption will make crypto assets play a major role in the economy in the next decade.
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Strong measures for tax collection
In its agenda, the Treasury Department stated that cryptocurrencies and digital assets are facilitating transactions related to illegal activities, including tax evasion, so the new regulations will expand the IRS's scope to detect transfers of value made with crypto assets, in order to minimize tax evasion while promoting better compliance.
“That’s why the President’s proposal includes additional resources for the IRS to address the growth of crypto assets.”, indicates the statement.
As explained by the Treasury, under the new financial account reporting regime, the agency will cover cryptocurrency accounts on exchanges and crypto trading houses, as well as accounts with payment services that accept these types of assets.
The Treasury Department said the cash, or fiat money, is also a common means of tax evasion, so companies that receive cash transactions will also be subject to the new regulations, once they come into force.
Cryptocurrencies and regulators
The rapid growth of crypto markets and the performance of cryptocurrencies in recent months is attracting the attention of regulators, who are keeping a closer eye on this powerful industry.
Recently, Janet Yellen, current Secretary of the Treasury, manifested There is a fiscal gap in the United States, which means that the government is failing to collect nearly $7.000 billion in taxes. When Yellen made these statements, she hinted that the state could implement additional measures to prevent this fiscal gap from becoming larger, and to be able to collect resources that help it sustain its expenses.
The Treasury secretary also suggested that interest rates could be raised to prevent the economy from collapsing. Now, in the recent statement, the Treasury noted that the fiscal gap exceeded $600.000 billion in 2019.
“According to Treasury analysis, the fiscal gap amounted to nearly $600.000 billion in 2019 and will grow to about $7 trillion over the next decade if not addressed.”
Strengthening crypto surveillance
At the end of last year, both the Treasury and the Financial Crimes Enforcement Network (FinCEN), attached to the Treasury, presented proposals to identify transactions made with cryptocurrencies, indicating that the privacy offered by the digital ecosystem facilitates tax evasion. In the case of the Treasury, the agency wanted to collect information related to transactions that occur from Wallets self-hosted, or personal; but faced with the imminent risks of this hasty proposal, the crypto community took action and sent more than 7.500 comments calling for an extension to fully analyze the implications of the hasty regulation.
For its part, FinCEN proposed lowering the threshold for reporting crypto-asset transactions to $250, with the aim of including smaller transactions within its regulatory controls.
In addition to this, IRS Deputy Chief Counsel, Robert Wearing, said in the middle of this month that users with cryptocurrencies who have not complied with their tax obligations can see their crypto assets seized by the entity. Wearing pointed out that the US government classifies cryptocurrencies and digital assets as property, so the IRS can seize them, just like real estate.
The transparency that networks offer block chains of cryptocurrencies such as Bitcoin They make every transaction made visible to everyone, including regulators in the United States and around the world, who can track and enforce the laws of the people involved in those transactions.
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