Crypto Transactions Over $10K To Be Reported To IRS: US Treasury

The US Department of Treasury is urging exchanges and custodians to disclose cryptocurrency transactions worth more than $10,000 to the Internal Revenue Service.

The Treasury Department took aim at digital assets in a report released on Thursday regarding tax reforms for President Joe Biden's American Families Plan, recommending that companies such as banks, payment providers, and cryptocurrency exchanges report more detail on their inflows and outflows from accounts each year beginning in 2023.

"Cryptocurrency already poses a significant detection problem by facilitating illegal activity broadly including tax evasion," the Treasury Department said in a release.
The IRS currently lacks independent verification of such transactions, which could result in a growing tax gap - the difference between taxes owed and taxes paid.

It went on to say that making large crypto transactions mandatory would help "minimise the incentives and ability to move income out of the current information reporting system."

The announcement comes as bitcoin's price has dropped below $40,000 for the first time in months, and other cryptocurrencies have been under pressure this week after the People's Bank of China appeared to warn against using digital coins as payment.

The Treasury Department grouped crypto with cash as a way to exclude companies from reporting requirements, saying that digital currencies were a "significant concern" for the government.