[2021-05-28] Biden’s 2022 Budget Includes New Crypto Reporting Proposals

[Woodie]

President Joe Biden’s 2022 budget proposal includes several new crypto reporting requirements, according to a pair of documents published Friday.

The budget published Friday, the first from the Biden administration, includes two proposals that would give the Treasury Department additional requirements around what type of information financial institutions must report to the Internal Revenue Service (IRS) or other Treasury sub-departments.

The first proposal, mentioned in the White House budget itself, would “expand broker information reporting with respect to cryptocurrency assets.”

A Treasury Department “Green Book” provided more context, saying the proposed change would “expand the scope of information reporting by brokers” by allowing them to share information across different jurisdictions that have partnered with the U.S.

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."

Gross proceeds, sales and “substantial foreign owners” in passive entities would be included in these reports.

The proposal would take effect for returns filed after Dec. 31, 2022, according to the document.

“Tax evasion using crypto assets is a rapidly growing problem. Since the industry is entirely digital, taxpayers can transact with offshore crypto exchanges and wallet providers without leaving the United States,” the Treasury Department document said as an explanation for the proposal.

Information reporting
The 2022 budget includes several other crypto reporting requirements, according to the Treasury document.

The second proposal to introduce a “comprehensive financial account reporting” structure 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.

This would include crypto asset exchanges and custodians, the document said.

“Separately, reporting requirements would apply in cases in which taxpayers buy crypto assets from one broker and then transfer the crypto assets to another broker, and businesses that receive crypto assets in transactions with a fair market value of more than $10,000 would have to report such transactions,” the proposal said.

read more https://www.coindesk.com/bidens-2022-budget-includes-new-crypto-reporting-proposals

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[bbc.reporter]

Trading cryptocoins beginning on 2023 will be much different from today. There will be more restrictions, less freedom and stricter KYC. The crackdown in China is beginning, I heard there will be an announcement from Chinese regulators on June 2. America’s crackdowns begin on 2022, I reckon the rest of the world on 2023. Let us enjoy while the cryptospace is still here.

[bryant.coleman]

Trading cryptocoins beginning on 2023 will be much different from today. There will be more restrictions, less freedom and stricter KYC. The crackdown in China is beginning, I heard there will be an announcement from Chinese regulators on June 2. America’s crackdowns begin on 2022, I reckon the rest of the world on 2023. Let us enjoy while the cryptospace is still here.

Unfortunately most of the countries are moving in this direction. So far this year, we have heard about similar news from countries such as India, China, South Korea, United States and Bangladesh, to name a few. I still remember the scenario we had in 2013 and 2014, when it was even possible to order anonymous pre-loaded plastic debit cards with Bitcoin from Bitplastic and a few other companies. Now it is almost impossible to order one, even with complete KYC verification.

[Lucius]

You don’t have to be so pessimistic when it comes to regulations, so it’s not something that’s unexpected, and it’s just a sign that Bitcoin is becoming more important than it was 5+ years ago. Greater adaptation entails more regulations,and I do not see any logic in the fact that the authorities should stand aside and let everyone do what they want when it comes to cryptocurrencies.

The crackdown in China is beginning...

I don’t realize that anyone can be so fascinated by what’s going on in China, so it’s news that’s at least 5 or more years old and repeats itself every year -> BTC Price Declines Following False Report of Bitcoin Ban in China (2014)

Crypto mining in China is something that has been tolerated for years, but it is not generally accepted - especially in some parts of China, as is the case now. One region that will impose strict measures is enough to warn others to look for alternative locations in other countries - in fact, the Chinese are doing us a favor in decentralizing hash power.

Now it is almost impossible to order one, even with complete KYC verification.

There is no logic in making such a service available at all, because apart from the fact that someone wants to protect their data, what is an anonymous card used for except money laundering or tax evasion? There are still ways to buy such a card, but it comes at a price - anonymity is neither easy nor cheap.

[bbc.reporter]

@Lucius. I am pessimistic because I am quite certain that regulations on the cryptospace will only become stricter over the years and make it harder to be accessed by users.

I speculate the Chinese crackdown not to be only fud this time. I might be wrong, however. We will know after June 2 on what policies will be proposed by Sichuan. But the crackdown is not only targetted to bitcoin as I have mentioned in another thread. It is a part of a nationwide crackdown on stopping financial crimes, stopping gambling on highly speculative investments and controling their carbon footprint.

[o_e_l_e_o]

and hosted wallet providers

So the requirements to collect KYC and pass all your details on to the government is now being expanded to web wallets. Time for everyone who is inexplicably still using the dumpster fire that is blockchain.com to finally get your own wallet and move your coins in to it. I wonder if "hosted wallet providers" also includes other services which you can deposit bitcoin to and they hold in a hosted wallet on your behalf, such as casinos or sportsbooks?

Gross proceeds, sales and “substantial foreign owners” in passive entities would be included in these reports.

The IRS, not content with sticking their noses in to just our business, now want to expand to sticking their noses in to the business of everyone in the world.

reporting requirements would apply in cases in which taxpayers buy crypto assets from one broker and then transfer the crypto assets to another broker

So not just buys, sells, and trades anymore. Now even if you simply move coins your own from one account to another, the IRS expect you to report it?

What a mess these proposals are. The IRS really are trying their hardest to make everyone move to decentralized exchanges.

[Vishnu.Reang]

There is no logic in making such a service available at all, because apart from the fact that someone wants to protect their data, what is an anonymous card used for except money laundering or tax evasion? There are still ways to buy such a card, but it comes at a price - anonymity is neither easy nor cheap.

I could give one example. Here in India, porn, gambling, cannabis.etc are banned. If I want to purchase a premium subscription with PornHub or Xhamster, I can't use my bank account or debit/credit card, as the payment will not get processed. For that purpose I need to use an anonymous payment method. If you ask me whether it is against the law, then yes. According to the Indian law, I am not supposed to access these sites. But I don't agree here. I believe that such laws are an infringement on personal liberty.

[Kakmakr]

So, as you can see... legislators are only worried about the taxes, because it all comes down to loopholes that can be used for tax evasion and that will hurt their budget. (salary)     They give a rats ass about the threat of the sovereignty of the Crypto currencies and the threat it pose for their reserve currency... because the potential tax losses is the most important. 

Also, the tradition financial sector are putting pressure on government to apply the same rules and regulation on Crypto assets, than what is required from them. (The brokers and financial investment firms are losing millions of dollars, because people are trading Crypto on their own and they not using their services.)