Proposed Crypto Regulations
Written by: Mary McCarthy
A proposal by the Biden administration calls for additional resources for the IRS to address the growth of crypto assets.
The proposed changes would work within the current asset reporting system to ensure that cryptocurrency transactions exceeding $10,000 in value are properly reported to the IRS. According to a recent report from the U.S Treasury Department, “cryptocurrency already poses a significant detection problem by facilitating illegal activity broadly including tax evasion.” The report from the Treasury Department states that “as with cash transactions, businesses that receive crypto assets with a fair market value of more than $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 cryptocurrency landscape is quickly evolving, and it is imperative to stay updated on what proposed regulations may mean for you as an investor. Federal and state laws regarding digital assets are likely to evolve significantly in 2021 as cryptocurrency rises in value and popularity among investors, businesses, and individuals.
An advantage to the Securities and Exchange Commission’s (“SEC”) and Internal Revenue Service’s (“IRS”) a larger role in the regulation of crypto assets is ultimately to legitimize cryptocurrency further, curb market manipulation, and decrease tax evasion.
Cryptocurrency is making waves in the economy, and it is evident that cryptocurrency will be the subject of much debate in the coming year. As regulations evolve and legislation is debated, it is crucial to keep updated with cryptocurrency’s latest regulations and guidelines.
Hatmaker, T. (2021, May 20). US Treasury calls for stricter cryptocurrency rules, IRS reporting for transfers over $10K. TechCrunch. https://techcrunch.com/2021/05/20/new-cryptocurrency-irs-rules-2023-crypto/.
Tomwfranck. (2021, May 20). U.S. Treasury calls for stricter cryptocurrency compliance with IRS, says they pose tax evasion risk. CNBC. https://www.cnbc.com/2021/05/20/us-treasury-calls-for-stricter-cryptocurrency-compliance-with-irs.html.
U.S. DEPARTMENT OF THE TREASURY THE AMERICAN FAMILIES PLAN … home.treasury.gov. (2021). https://home.treasury.gov/system/files/136/The-American-Families-Plan-Tax-Compliance-Agenda.pdf.