US targets cryptocurrency as Biden administration unveils tax proposals

The United States is keen to bring cryptocurrency into the tax net due to its rapidly growing popularity.

According to a report published in Bloomberg, the Biden administration has proposed to collect taxes from those who evade taxes using cryptocurrency. Just last year, the Internal Revenue Service (IRS) added a clause in the Individual Tax Return Form 1040 regarding cryptocurrency.

In this regard, the US Treasury Department says that one of the proposals made by the Biden administration to further improve tax collection is to report with the Internal Revenue Service for transferring more than $10,000 in cryptocurrency.

"As with cash transactions, businesses that receive cryptoassets with a fair market value of more than $10,000 would also be reported on," the Treasury Department said in the report.

The Treasury Department says the role of cryptocurrency in current business transactions is very small. However, the Biden administration is working to bring more transparency to virtual currency transactions.

The new US administration is also seeking account flow reports from banks to boost tax revenues.

“Another significant concern is virtual currencies, which have grown to $2 trillion in market capitalization. Cryptocurrency already poses a significant detection problem by facilitating illegal activity broadly including tax evasion,” said the US Treasury Department report.

It is pertinent to mention that cryptocurrency has received a lot of flak due to the problems of tax evasion and facilitation of illegal activities.