Biden proposes IRS disclosure of all crypto transactions $10,000 and up
As part of an $80 billion effort to update IRS auditing abilities, the American Families Plan wants to bring crypto transfers into the light of day.
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The US Treasury on Thursday released a detailed report outlining proposed changes to IRS reporting requirements, as laid out in the Biden administration's American Families Plan. Among numerous other changes intended to "raise revenue, improve efficiency and build a more equitable tax system," the legislation includes new rules for reporting the exchange of cryptocurrencies like Bitcoin.
Specifically, should the bill become law, you'll need to report those transfers to the IRS when they exceed $10,000 -- the same reporting threshold for cash deposits. The Treasury says the move will help curb tax evasion and other crimes.
"Cryptocurrency already poses a significant detection problem by facilitating illegal activity broadly including tax evasion," reads the Treasury's report. "This is why the President's proposal includes additional resources for the IRS to address the growth of cryptoassets."
The move is part of an $80 billion effort within the American Families Plan to enhance the ability of the IRS to conduct audits, which administration officials say could generate as much as $700 billion over the next decade. The Treasury notes that cryptocurrencies represent a relatively small portion of business income today, but adds that they're expected to rise in importance during the next decade.
"Within the context of the new financial account reporting regime, cryptocurrencies and cryptoasset exchange accounts and payment service accounts that accept cryptocurrencies would be covered," the report reads. "Further, as with cash transactions, businesses that receive cryptoassets with a fair market value of more than $10,000 would also be reported on."
"Such comprehensive reporting is necessary to minimize the incentives and opportunity to shift income out of the new information reporting regime," the report adds.
Initially announced on April 28, the American Families Plan contains roughly $1 trillion in new investments and $800 billion in tax cuts.