U.S. Department of the Treasury will reportedly push to extend the reach of new rules designed to govern the cryptocurrency space. Closely following the infrastructure package freighted with last-minute crypto taxation provisions is the upcoming budget reconciliation bill that could also see additional requirements for cryptocurrency businesses.
Citing an unnamed official within the Biden administration, Roll Call reported on Monday that the administration is looking to append provisions to the budget bill requiring U.S. digital asset firms report information on their foreign clients.
As with the infrastructure bill, the purpose of the potential regulation is to enhance tax compliance and boost tax revenues at the expense of the crypto industry. As per the official’s account, the U.S. government would then exchange the data on foreign nationals’ cryptocurrency-related activity with the respective governments to obtain information on U.S. citizens’ crypto operations overseas.
This information would be then used to improve tax compliance.
Turning to the crypto sector for new sources of revenue is one of the measures suggested within the Improving tax administration rubric of Treasury’s strategic Revenue Proposals or the fiscal year 2022.
Along with other proposed means of closing the “tax gap” — the delta between what taxpayers owe to the government and what is actually paid — the prospective data sharing provisions are aimed at helping Democrats fund the ambitious budget package that is expected to include massive social welfare and healthcare expenditures.