Keywords: Cryptocurrency, Bitcoin, IRS, taxation, transactions

In the United Stated the Biden administration plans to require companies to report all crypto transactions worth more than $10,000 to the U.S. Internal Revenue Service. The purpose of this is to combat tax evasion brought about by the use of cryptocurrencies. This will be implemented starting in 2023, according to Bloomberg news agency[1].

The plan is part of the budget increase of the United States tax authority, the Internal Revenue Service, by $80 billion until 2031. This translates into a doubling of the number of employees at the IRS. With this expansion, mainly cryptocurrencies would be in the crosshairs. Cryptocurrencies - also known as digital currencies - have become enormously popular in recent years due to various reasons. It could be used as a vehicle to transfer cash from one place to another without having to go through banks and being registered due to the decentralized nature of blockchains and cryptocurrencies. This enables cryptocurrency transactions to stay under the radar of the tax authorities. Bitcoin in particular is attracting a lot of attention, but in its wake also other digital currencies, often because they increase in value a lot in a short period of time. The current number two in ranking; Ethereum has also grown substantially in value lately.

The Biden administration is also calling on banks to report on account flows to help boost tax-compliance with regards to cryptocurrencies. “Cryptocurrency already poses a significant detection problem by facilitating illegal activity broadly including tax evasion,” the American Treasury Department said. As they had already been working, prior to the start of this year, on proposed regulations to require brokers to report information to the IRS on their customers and the cryptocurrency sales they facilitate.