US to require Bitcoin exchanges to report cryptocurrency transactions over $10,000

The Biden administration’s proposal to strengthen tax compliance includes a requirement to pass information about cryptocurrency transactions exceeding $10,000 to the Internal Revenue Service (IRS), according to a report from the U.S. Treasury Department.

Officials say digital assets are a “serious problem”. They facilitate illicit activity, including tax evasion.

“It is expected that the role of cryptocurrency transactions will increase over the next decade,” the report states.

Introducing new rules will minimise the opportunities to conceal income, the Treasury said. According to the document, the reporting regime will extend to “foreign financial institutions, cryptocurrency exchanges and custodians”.

“As with traditional transactions, a business receiving crypto assets with a fair market value above $10 000 will also be required to report them,” the department stressed.

The measures are expected to take effect in 2023.

Earlier, the IRS clarified that US residents do not need to report the purchase of cryptocurrency on the first page of Form 1040 if they follow the Buy&Hold strategy. Buy&Hold.

In May 2021, authorities clarified that they regard digital assets as property that can be seized to satisfy tax debts.

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