U.S. Treasury has disclosed that the current cryptocurrency climate could cause tax evasion without further regulation.
The report, which describes President Joe Biden’s proposed tax compliance initiative, says “Biden is reportedly looking into how to change things and make things into a ‘more equitable’ tax regime, with a series of proposals looking to boost resources for pursuing noncompliant taxpayers, leverage information to use against those misreporting income ‘derived from opaque categories,’ improving the outdated IRS tech and regulating paid tax preparers and increasing penalties for those who commit offence on purpose.” The report further states that noncompliance will only be worsen by the more sophisticated attempts at tax evasion.
Biden’s initiative will be adding resources for the IRS to address crypto, which the report assumes will become more of a presence in the economy — especially as a broader financial account reporting begins to happen. And as with cash assets, those businesses receiving crypto assets of over $10,000 would be reported on.
Although, Cryptocurrency is currently a small share of business transactions, the report says comprehensive reporting is necessary to help avoid fraud or people trying to go out of the “new regime” of finance reporting.