- The US Treasury said a proposal to beef up the IRS includes reporting any transfers of at least $10,000 in cryptocurrencies for tax purposes.
- “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.
- Bitcoin sold off by as much as 6% on Thursday following the announcement.
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The Treasury Department detailed plans to have any cryptocurrency transfers of at least $10,000 to be reported to the Internal Revenue Service in a report on Thursday.
Bitcoin pared its gains and fell by as much as 6% in afternoon trading following the release of the report, adding to the cryptocurrency’s volatile week of trading in which it fell more than 30% in a day.
“As with cash transactions, businesses that receive cryptoassets with a fair-market value of more than $10,000 would also be reported on,” the Treasury Department said in the report. The report is part of the Biden administration’s plans to beef up the IRS in hopes of collecting more tax revenue that otherwise goes unreported.
The IRS first began asking individuals if they ever bought or sold virtual currencies in 2020, and now requires individuals to report capital gains realized from any cryptocurrency transactions.
The Treasury Department said that reporting the crypto transactions is necessary “to minimize the incentives and opportunity to shift income out of the new information reporting regime,” according to the report.
“Cryptocurrency already poses a significant detection problem by facilitating illegal activity broadly including tax evasion,” the Treasury added in its report.
The move by the Treasury Department comes after the Colonial gas pipeline was briefly shutdown due to a ransomware threat, in which the company ultimately paid the hackers $5 million in bitcoin. Those same hackers have collected a total of $90 million in bitcoin by running a similar ransomware scheme against other companies.