The US Treasury Department is calling for new rules for more data sharing from cryptocurrency exchanges.
Crypto regulation in the USA
Roll Call, the Capitol’s newsletter, said a government official urged the Biden administration to urge Democrats to add additional tax compliance rules to cryptocurrency transactions in an upcoming $ 3.5 trillion budget alignment package.
Specifically, it wants intermediaries trading in cryptocurrencies in the United States to report all foreign account holders to the government and can use the data to obtain information about U.S. investors trading in digital currencies in other countries.
The goal is greater fiscal control because the US Treasury Department says it is concerned about the number of foreign companies that US taxpayers use to try to evade taxes, especially with regard to profits from the cryptocurrency trade.
According to IRS Commissioner Charles P. Rettig, the difference between the taxes owed and actually paid is $ 1 trillion a year, and some of that is unpaid taxes on cryptocurrency transactions.
More data sharing in the fight against tax evasion
However, the proposal of the treasury department has not yet been accepted by Congress, and if approved, the new rules would not apply until 2023.
In the fight against the potential use of cryptocurrencies for tax avoidance, intermediary reporting is considered key to identifying taxpayers.
In addition, under current law, in order to obtain such data from foreign intermediaries, it is necessary to provide the same type of information to foreign authorities, and therefore the Treasury Department would like to obtain information on transactions of foreign nationals on US exchanges.
The fiscal resolution on the 2022 budget, which is to include the new rules, requires that they be tabled by 15 September. However, the debate on this issue seems to have already begun, with some critical acclaim, in particular on the grounds that similar rules may be too burdensome for crypto exchanges.
Theoretically, nothing should change for users, except that it will be more difficult for them to hide any profits from the cryptocurrency trade. For those who declare everything they earn, there would be no difference.
However, traditional financial markets have been operating in this way since 2010, so it is difficult to imagine that crypto intermediaries could avoid doing so. However, obtaining this information from decentralized exchanges remains impossible.