The U.S. Internal Revenue Service (IRS) says it needs congressional authority in order to obtain the information needed to regulate cryptocurrency. “We get challenged frequently and to have a clear dictate from Congress on the authority for us to collect that information is critical,” IRS Commissioner Charles Rettig said.
IRS Says It Needs More Authority to Collect Crypto Data
IRS Commissioner Charles Rettig said Tuesday during a Senate Finance Committee hearing that the IRS needs more authority to do its job in regulating cryptocurrency. He said:
I think we need congressional authority. We get challenged frequently and to have a clear dictate from Congress on the authority for us to collect that information is critical.
The commissioner noted that the cryptocurrency market is growing and its value is now approximately $2 trillion, with more than 8,600 exchanges worldwide.
The Biden administration has proposed requiring businesses to report information on cryptocurrency transactions valued at more than $10,000 to the IRS. This is part of the administration’s broader efforts to crack down on tax evasion. “Cryptocurrency already poses a significant detection problem by facilitating illegal activity broadly including tax evasion,” the U.S. Treasury Department stated.
Most crypto, virtual currencies are designed to stay off the radar screen.
The IRS recently issued John Doe summonses to cryptocurrency exchanges Circle, including Poloniex, and Kraken to obtain records of their cryptocurrency users. The tax agency seeks “information about U.S. taxpayers who conducted at least the equivalent of $20,000 in transactions in cryptocurrency during the years 2016 to 2020” on these exchanges. The summonses direct the exchanges to “produce records identifying the U.S. taxpayers described above, along with other documents relating to their cryptocurrency transactions.”
Robert Wearing, IRS’ deputy associate chief counsel for Procedure & Administration, said last month that the agency will seize cryptocurrencies and sell them to satisfy tax collection if taxpayers fail to meet their tax obligations. In March, the IRS launched Operation Hidden Treasure to target unreported crypto income.