US Treasury: Report Crypto Transfers of $10,000+ to IRS

The Treasury Department on Thursday revealed plans to crackdown on the largely unregulated digital asset market. 

All cryptocurrency transfers of $10,000 or more must be reported to the Internal Revenue Service, the Treasury said in a report, which is part of the Biden administration’s attempted overhaul of the tax system. 

“Cryptocurrency already poses a significant detection problem by facilitating illegal activity broadly including tax evasion,” the Treasury said in a release. “This is why the President’s proposal includes additional resources for the IRS to address the growth of cryptoassets.”

The new guidelines come shortly after the IRS first began asking taxpayers for information on whether or not they bought or sold cryptocurrencies in 2020. 

The new reporting rules are intended “to minimize the incentives and opportunity to shift income out of the new information reporting regime,” the Treasury said. 

Bitcoin faltered following the release of the report and was trading up 1.8% at time of publication, according to data from Coin Metrics. Earlier on Thursday, the largest digital asset was up 9%. 

Thursday’s report is part of the Biden administration’s broader goal of cracking down on tax evasion and compliance issues. The president recently revealed plans for two multi-trillion dollar proposals to overhaul American infrastructure and social programs. The administration is pointing toward increased taxes on corporations and the wealthy will fund the ambitious plans. 

Biden is also proposing increasing the IRS budget and updating its technology. There was a $600 billion discrepancy between the taxes owed to the government and the taxes actually paid in 2019, according to the Treasury’s estimation.