Cryptocurrency News

IRS needs congressional authority to handle crypto, chief says

The head of the Internal Revenue Service, Charles Rattig, called on lawmakers for not taking the initiative to address the problem of many US residents not paying taxes on cryptocurrencies.

In Tuesday’s Senate hearing on the IRS’s fiscal year 2022 budget, Retigo said The agency may need “clear instructions from Congress” to regulate cryptocurrencies. The IRS has listed $32 million in its budget for “crypto-related enforcement operations” as well as $41 million related to cybercrime in its efforts to address the issue of non-reporting or under-reporting taxpayers.

“It’s important for us to have the right to collect that information,” Ratig said. “The most recent market cap in that world – in the crypto world – is over $2 trillion and over 8,600 exchanges worldwide, and most crypto, virtual currencies by design are designed to stay off the radar screen, so We will be challenged.”

Ratig was responding to Ohio Senator Rob Portman, who said in April that he intended to introduce a bipartisan bill Aimed at solving the problem of many crypto users in the US not paying taxes. The IRS chief said “non-filing virtual currency” would be an area the agency would focus on closing the tax gap in the future, and that he would “appreciate the opportunity” to work with lawmakers on the issue.

Last month, Treasury Department officials called crypto exchanges and custodians Report transactions over $10,000 As part of President Joe Biden’s American Family Plan tax proposal to the IRS. The agency currently has no independent verification of such transactions, potentially widening the tax gap.

Ritig added at the hearing:

“We need additional equipment, and we absolutely need additional resources.”

According to IRS data in October 2020, 83.6% were taxes have paid “Voluntarily and on time” from 2011 to 2013. However, the Treasury Department has estimated that the tax gap could reach nearly $7 trillion over the next decade if the government fails to act.