Matthew De Saro, 20 May 2021
The United States Treasury Department released a statement on Thursday announcing their plans to crack down on tax evasion using cryptocurrency. The Treasury Department plans to raise an additional $700 billion through the new tax compliance measures.
In the 22-page report, officials highlighted a number of policies to grow enforcement aimed at combating the expanding tax gap. The tax gap is the calculated difference between what taxpayers are paying and what they actually owe. Currently, the tax gap is around $600 billion annually.
The Internal Revenue Service (IRS) commissioner, however, believes the number could exceed $1 trillion when cryptocurrencies are taken into account. The policies identified include increased reporting requirements, new auditor tools, and new rules specific to cryptocurrencies.
Closing the gap
The plan will require any transfer of $10,000 or more will be reported to the IRS and could raise as much as $2 trillion over the next 20 years. Just getting close to closing that gap could be a huge step in funding President Biden’s multi-trillion-dollar spending proposals. Proposals aimed at bettering childcare, manufacturing, and other domestic priorities.