The US Treasury Department plans to impose new reporting requirements for crypto. Soon, banks and financial institutions will have to report information to the IRS. Exchanges, custodians, and crypto payment services are slated to have to report to the IRS too.
Treasury officials project that the initiatives could raise $320 billion in revenue through 2031.
President Joe Biden’s tax enforcement plan would nearly double the number of employees at the Internal Revenue Service over the next ten years and make banks and cryptocurrency exchanges comply with stricter guidance with the government, according to a report released by the Treasury Department on Thursday.
Treasury officials estimated that the plan would raise roughly $700 billion over the course of ten years and $1.6 trillion in the decade after enactment, though officials noted that the figures are conservative since it’s difficult to calculate.
The report comes as Biden has called for $80 billion to enhance resources and operations at the IRS over the next decade to ensure wealthy tax evaders don’t engage in tax dodging and, instead, end up paying the necessary amounts owed.
Here s how the Biden administration plans to collect $700 billion from wealthy tax cheats By Sarah Ewall-Wice Former IRS chief endorses Biden s tax plan
The Biden administration is looking to make sure taxpayers largely the wealthiest Americans pay the taxes they legally owe. The Treasury Department estimated that the so-called tax gap, or the difference between what is owed and what was actually paid, was nearly $600 billion in 2019 and will reach $7 trillion over the next decade.
Treasury officials say the tax gap disproportionately benefits higher earners and the goal with their tax compliance agenda released Thursday is to promote equity in the tax system. The administration says while 99% of taxes due on wages are paid to the IRS, compliance on less visible income sources is estimated to be just 45%, according to a Treasury Department report.
Audits may be on the decline but they still occur.
Here s What You Need to Remember: If you’re worried about an audit, then be honest and use tax prep software such as TurboTax or hire a professional tax preparer. That should help you stay clear of the audits.
One of the greatest fears for taxpayers is facing an audit. Fortunately, provided you file on top and are careful not to make mistakes, you should never actually face an audit. In fact, just one percent of Americans are audited each year, and that figure is still typically weighted towards those with higher incomes.