Treasury asks crypto transfers above $10,000 to be reported to IRS

The U.S. Treasury announced to strengthen the Biden administration’s new tax plan, investors would be required to report to the Internal Revenue Service (IRS) for any digital asset-related transaction of at least $10,000.

“As with cash transactions, businesses that receive crypto assets with a fair market value of more than $10,000 would also be reported on,” the Treasury Department said in a proposal report named ‘The American Families Plan Tax Compliance Agenda’ released Thursday.

The Treasury said, “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 IRS in 2020 added a line about cryptocurrency on the individual tax return filing, Form 1040, to inquire about virtual currency transactions.

“Cryptocurrency already poses a significant detection problem by facilitating illegal activity broadly including tax evasion,” the report said, pointing out the $2 trillion digital asset market cap.

The Treasury Department also asked financial institutions to report on account flows to help boost tax-payment compliance.

Earlier, the U.S. federal court authorized IRS to summon tax-evaders who transacted over $20,000 between 2016 and 2020 in cryptocurrency payments firm Circle Internet Financial Inc, Poloniex LLC, and crypto exchange Kraken.

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