US Treasury seeks to flag cryptocurrency transfers, doubling IRS workforce
The Biden administration’s tax enforcement proposal would require cryptocurrency transfers over $ 10,000 to be reported to the Internal Revenue Service and more than double the IRS’s workforce over a decade, said Thursday the US Treasury.
The plans were part of a Treasury report detailing the Biden administration’s proposal to invest some $ 80 billion in the U.S. tax agency through 2031 to improve compliance and revenue collection.
“As with cash transactions, companies that receive crypto-assets with a fair market value of more than $ 10,000 would also be reported,” the Treasury said in the report, which noted that these assets, are likely to gain in importance over the next decade. part of business income.
Cryptocurrency assets currently have a market cap of around $ 2 trillion.
The Treasury disclosure blunted a rally in the dollar value of bitcoin on Thursday – to a 6% gain from an earlier 10% rise read more. The gains came a day after bitcoin fell 30% and the number two digital currency ether fell 45%.
The reporting requirements, depending on their structure, could also give the government a better understanding of U.S. companies that are extorted to pay ransoms to hackers, almost invariably in cryptocurrency, to regain control of their computer systems.
Private sector law enforcement and cybersecurity experts have complained that a lack of transparency around these ransonware incidents contributes to their continued occurrence.
The Treasury report said the investments proposed by the IRS would add a total of more than 86,000 full-time equivalent employees to the agency’s ranks over the next decade, reversing a long-term decline and more than doubling it. IRS 2019 workforce of 73,554 full-time equivalents. positions.
He said the investment plan would allow the hiring of at least 5,000 additional law enforcement officers over the decade.
REDUCE THE GAP
The Treasury said its proposal would reduce by about 10% the “fiscal deficit” it estimates to about $ 7 trillion or 3% of U.S. economic output over the next decade, thus increasing some $ 700 billion. according to a “conservative” estimate.
The tax gap – the difference between taxes legally owed and those collected by the IRS – was estimated at $ 584 billion in 2019, according to the guidance document.
In the second decade, he estimated that the investments would bring in $ 1.6 trillion in additional revenue, as revenue officers hired in previous years gain experience in processing very complex tax returns filed by taxpayers. high net worth individuals.
The IRS investment plan would also replace the Treasury’s 1960s IT architecture with new systems capable of machine learning that would be better able to detect suspicious tax returns. The IRS is the only federal agency to have computers running on the old Common Business-Oriented Language (COBOL) system, Treasury said.
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