The United States Internal Revenue Service (IRS) is seeking Congressional Authority to obtain information on transactions made on virtual currency, such as Bitcoin, that would be subject to tax obligations. The IRS estimates that the average taxpayer made $28,000 in taxable income using cryptocurrency in 2017.
The IRS has always had a vested interest in collecting taxes, but now, there is a chance the government will jump on the opportunity to obtain information concerning cryptocurrency transactions. This comes at a time when the IRS is increasingly targeting tax cheats, and cryptocurrency is a new target in their quest.
The Internal Revenue Service (IRS) is seeking congressional authority to obtain taxpayer information as part of its efforts to investigate illicit activities tied to virtual currencies. The IRS, along with the Department of Justice, has been investigating transactions tied to virtual currencies in order to combat money laundering and tax evasion.The US Internal Revenue Service (IRS) says it needs congressional approval to obtain the information needed to regulate cryptocurrencies. We are often challenged, and a clear directive from Congress that we have the authority to collect this information is very important, IRS Commissioner Charles Rettig said.
IRS says it needs additional authority to collect data on cryptocurrencies
IRS Commissioner Charles Rettig said Tuesday during a Senate Finance Committee hearing that the IRS needs additional powers to fulfill its mission of regulating cryptocurrencies. He said: I think we need the authority of Congress. We are often challenged, and it is essential that Congress provide clear guidance on the authority to collect this information. The commissioner noted that the cryptocurrency market is growing rapidly and is now worth about $2 trillion, with more than 8,600 exchanges worldwide. The Biden administration has proposed requiring companies to report transactions in crypto-currencies worth more than $10,000 to the IRS. This measure is part of the government’s efforts to combat tax evasion. Cryptocurrencies are already a major detection problem because they facilitate illegal activities in a broad sense, including tax evasion, according to the US Treasury. Rettig gave his opinion: Most cryptocurrencies, virtual coins, are designed to stay out of sight. The IRS recently subpoenaed cryptocurrency exchanges Circle, including Poloniex, and Kraken to obtain data on their cryptocurrency users. The IRS is asking for information on U.S. taxpayers who made at least the equivalent of $20,000 in cryptocurrency transactions on these exchanges between 2016 and 2020. The subpoenas require the exchanges to provide data identifying the U.S. taxpayers described above, as well as other documents related to their cryptocurrency transactions. Robert Weering, the IRS’s deputy general counsel for procedures and administration, said last month that the agency would seize and sell cryptocurrencies to meet tax requirements if taxpayers fail to meet their tax obligations. In March, the IRS launched Operation Hidden Treasure to counter undeclared profits from cryptocurrencies. What do you think about the IRS asking Congress for permission to collect data on cryptocurrencies? Let us know your comments in the section below. Photo credit: Shutterstock, Pixabay, Wiki Commons Denial: This article is for information only. It is not a direct offer or invitation to buy or sell, nor is it a recommendation or endorsement of any goods, services or companies. Bitcoin.com does not provide investment, tax, legal, or accounting advice. Neither the company nor the author shall be liable, directly or indirectly, for any damage or loss caused or alleged to be caused by or in connection with the use of or reliance on any content, goods or services referred to in this article.The Internal Revenue Service (IRS) has been making moves to collect data on cryptocurrency transactions and block accounts of taxpayers who have felt the effect of this new phenomenon. Back in July, the IRS stated that it is going to start asking for information on US taxpayers who have paid bitcoin as a business expense. It is also thinking about asking for data on cryptocurrency transactions, as well as those who have held bitcoin as an asset.. Read more about irs crypto audit and let us know what you think.
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