US President Joe Biden has Called for Stricter Tax Evasion Regulations For Cryptocurrency Investors across the World
US President Joe Biden now wants to nab the global cryptocurrency investors who are active in the US market or US exchanges. In its “Greenbook” of revenue proposals on May 28, 2021 (Friday), the US Treasury Department has proposed to collect data of cryptocurrency investors who are active in the United States market.
Reports say that the Joe Biden administration is looking for international cooperation on a broader crackdown on tax evaders. The US government is mulling the idea of collecting details of all foreign individuals holding accounts with all the US exchanges and other wallet services.
The Treasury has noted that “certain passive entities and their substantial foreign owners” are dodging the tax liabilities of their respective countries. The Greenbook proposal reads:
“The global nature of the crypto market offers opportunities for U.S. taxpayers to conceal assets and taxable income by using offshore crypto exchanges and wallet providers.”
The United States government is eager to work with foreign governments in exchange for the information on providing information of individuals or entities that are evading their tax liabilities. The IRS Criminal Tax Division has started to work with its counterparts in different countries such as Canada, the United Kingdom, Australia, and the Netherlands.
This is a significant move as the Joe Biden administration wants to ramp up tax collection and also bolster the tax administration.
In addition, The Fiscal Year 2022 Revenue Proposal proposed that all companies receiving crypto payments above US$10,000 must be reported to the regulators. In fact, the companies also have to provide detailed information of all the businesses and individuals with whom they are making transactions.
The IRS officials believe that the gap between the crypto taxes owed to the government and what is actually paid on time is widening. Bloomberg has reported on the basis of the information received from IRS Commissioner Charles Rettig that the tax gap is more than US$1 trillion a year. The report has clearly mentioned that:
“Under the proposal, financial institutions would have to report gross account inflows and outflows with a breakdown for physical cash, transactions with a foreign account and transfers to and from another account with the same owner. The requirement would apply to all business and personal accounts except those below a US$600 threshold.”
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