Crypto currency has recently been a huge part of the economy with many massive companies promoting the use of the currency. As the popularity rises many people prefer to use popular digital currency like Bitcoin to make purchases. Over the next couple years it has become a huge hit becoming a big part of the global economy.
In 2009, the Bitcoin was presented as an alternative to the physical money. However, through the years, cryptocurrencies have been consolidated to such an extent that there are already many and diverse companies that allow the payment of their products or services with cryptocurrencies. While the US kept a blind eye towards this currency they are now enforcing a new tax regulation on crypto the same way the US dollars are regulated.
The report notes that cryptocurrency “already poses a significant problem by facilitating illegal activity broadly, including tax evasion.”
Another policy change would require payment-services providers to file Form 1099 reports in order to discourage businesses from attempting to hide their income by using alternatives to traditional banks.
The Treasury report also said that even though cryptocurrency transactions are a small fraction of business transactions in the US, requiring large crypto transactions to be reported would help “to minimize the incentives and opportunity to shift income out of the new information reporting regime.”
The Treasury Department’s Office of Tax Analysis estimated that the proposed updates would raise an additional $700 billion in tax revenue over the next 10 years and could bring in as much as $1.6 trillion in the following decade. However, many of the changes the Biden administration proposes in the report would require Congressional approval.
With the new changes in society it is important to keep up with the new regulations and invest responsibly.