The Internal Revenue Service says it needs $32 million to better monitor money made on Bitcoin and other cryptocurrencies — surveillance that could spell the end of investors stashing so-called “private money” in the cryptosphere.
In its 2022 Congressional Budget Justification & Annual Performance Report and Plan, the IRS said it needs millions for bitcoin and crypto surveillance and tax enforcement. If all goes according to plan, the IRS will employ an array of specialized contractors to boost its internal efforts to shut down crypto-based tax evasion.
It is almost impossible for the IRS to trace crypto income or transactions if they go unreported by exchanges, businesses, and other third parties. That means the income may not be taxed, CNBC reported.
This is why President Joe Biden wants to crack down on crypto markets. The Biden administration recently proposed requiring the collection of data on foreign cryptocurrency investors active in the U.S., Business Insider reported.
The Treasury Department, in its “Greenbook” of revenue proposals, proposed requiring cryptocurrency brokers such as exchanges and hosted-wallet providers to provide information to the IRS on foreign individuals indirectly holding accounts with them.
This would be in line with the IRS’s new plan.
The IRS wants $13.2 billion for the 2022 fiscal year, an increase of $1.2 billion compared to the 2021 fiscal year. For its enforcement side, the IRS is seeking for $5.46 billion — a year-over-year increase of $458 million, The Block Crypto reported.
Within that figure, the IRS needs an additional $32 million to boost its crypto and cyber operations. This will include funds to hire personnel and “build out a full internal dashboard for cryptocurrency and blockchain analytics,” The Block Crypto reported.
Of the $32 million, $23 million would be spent on “contractor services.” Contractors would generate leads on illegal crypto activity.
Listen to GHOGH with Jamarlin Martin | Episode 74: Jamarlin Martin Jamarlin returns for a new season of the GHOGH podcast to discuss Bitcoin, bubbles, and Biden. He talks about the risk factors for Bitcoin as an investment asset including origin risk, speculative market structure, regulatory, and environment. Are broader financial markets in a massive speculative bubble?
Bitcoin is considered with the most private form of currencies but this could change with the new IRS plan.
A bitcoin can truly function as peer-to-peer, private cash, Coin Geek reported.
“Partnering with other IRS business units, this contract would bring on investigators to provide illicit activity pattern identification and monitoring,” the report said.
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