According to a pair of documents released on Friday, President Joe Biden’s 2022 budget plan includes various additional crypto reporting requirements.
Two proposals in the Biden’s administration first budget, released on Friday, would give the Treasury Department more authority over the types of information financial institutions must send to the Internal Revenue Service (IRS) or other Treasury sub-departments, including crypto.
The first idea is to “expand broker information reporting with respect to bitcoin assets,” as stated in the White House budget.
The proposed move would “increase the breadth of information reporting by brokers” by allowing them to exchange information across other jurisdictions that have cooperated with the US, according to a Treasury Department “Green Book.”
The document states:
“The proposal would require brokers, including entities such as U.S. crypto-asset exchanges and hosted wallet providers, to report information relating to certain passive entities and their substantial foreign owners when reporting with respect to crypto assets held by those entities in an account with the broker.”
These disclosures would contain gross proceeds, sales, and “substantial foreign owners” in passive businesses.
According to the paper, the plan would apply to returns submitted after December 31, 2022.
“Using crypto assets to evade taxes is a quickly expanding concern. Taxpayers can deal with overseas crypto exchanges and wallet providers without leaving the United States since the business is totally digital,” according to a Treasury Department memo explaining the idea.
According to the Treasury paper, the 2022 budget includes numerous other crypto reporting obligations.
The second proposal, which would require financial institutions to report data on user accounts with a breakdown on different types of transfers above a de minimis threshold of $600 for tax compliance purposes, would require financial institutions to report data on user accounts with a breakdown on different types of transfers above a de minimis threshold of $600.
The memo said that this would cover crypto-asset exchanges and custodians.