U.S. Treasury mandating cryptocurrency sales over $10K be reported to IRS

In an attempt to crack down on tax evasion and illegal activity, the U.S. Treasury Department has begun taking steps to mitigate potential problems relating to cryptocurrencies.

On Thursday, the U.S. Treasury Department announced a plan to tighten regulations on cryptocurrency markets and cryptocurrency holders.

The department worries that cryptocurrency could be used to facilitate tax evasion, among other illegal activities. Now it requires any transfer worth $10,000 or more to be reported to the IRS.

According to the CNBC, the move is a part of the Biden administration's broader plan to crack down on tax evasion. The treasury estimates the difference between taxes owed and taxes paid to the U.S. government to be nearly $600 billion in 2019.

The administration is looking for ways to ensure that the government gets the tax money that it is owed. Current proposals include increasing funding to the IRS, investing in new technology, and issuing more severe penalties for tax evasion.

News of the tightening regulations were likely to blame for the cryptocurrency slide over the last month. Bitcoin, for example, saw a 25% decrease in its value in the previous month.

Tesla recently stopped accepting Bitcoin after the company had cited environmental concerns, and the value of Bitcoin tumbled 15% as a response.

The Chinese government has banned financial institutions from conducting any business involving cryptocurrency, and warned against trading. The ban is not applied to individual holders.

Stay on top of all Apple news right from your HomePod. Say, "Hey, Siri, play AppleInsider," and you'll get latest AppleInsider Podcast. Or ask your HomePod mini for "AppleInsider Daily" instead and you'll hear a fast update direct from our news team. And, if you're interested in Apple-centric home automation, say "Hey, Siri, play HomeKit Insider," and you'll be listening to our newest specialized podcast in moments.

12 Comments

mac_dog 16 Years · 1084 comments

About 3 years ago

But it’s not accepted anywhere as currency here.

NOW they’re worried about tax evasion? What about going after individuals and corporations that set up shell companies to evade paying taxes?

MplsP 8 Years · 4047 comments

mac_dog said:

But it’s not accepted anywhere as currency here.

NOW they’re worried about tax evasion? What about going after individuals and corporations that set up shell companies to evade paying taxes?

There were some smaller online retailers that would accept it. I don’t know if that’s still the case or not.

The IRS views crypto as an asset rather than a currency, which is probably the proper category for it. Bitcoin acts more like a stock than a currency.

As far as tax evasion goes, they should be going after everyone but the IRS has been significantly underfunded. As someone who pays his taxes I fully support prosecuting anyone who doesn’t.

hmlongco 9 Years · 586 comments

mac_dog said:

But it’s not accepted anywhere as currency here.

NOW they’re worried about tax evasion? What about going after individuals and corporations that set up shell companies to evade paying taxes?

You're kidding, right? Much easier to set things up so you can hammer the people who lack the means to spend millions of dollars in legal fees defending themselves. I mean, what's a couple of million in legal fees when it prevents you from having to pay a billion or so in taxes?

Of course, that's an ongoing expense. Much better to spend the million or so on a few political "donations" that let you set things up such that your swindling is legal in the first place....

sflocal 16 Years · 6138 comments

I find it interesting that the headline says "sales". I was thinking of cashing-out anything above $10K, but they're now saying if I buy something - say a car - for $20K in Bitcoin, not cash... then I technically have to report that? I do understand their mentality on some level, but if I have to report buy something in bitcoin, will the IRS allow me to deduct the devaluation of bitcoin as well?

Good luck tracking that. I don't have any bitcoin, but if I did, I would certainly test the ability for the IRS to determine the gazillion, relatively anonymous transactions in a blockchain were from U.S. transactions, and to determine the identity of the person(s) that did those transactions and whether they were reported. That's a whole level of forensics I'm curious if the I.R.S. is even capable of.

glennh 9 Years · 74 comments

It looks like the “Clepto-currencies”days are numbered just like the “DotCon”!

Do you think IRS was told to crack down after the ransomware pipeline extortion?

No government on the planet will allow any currencies to exist that it or other governments can’t control, manipulate or SEIZE!