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IRS Announces New Crypto Reporting RequirementsRead Time: 1 min
On May 20, 2021, the IRS announced that “businesses that receive crypto assets with fair market value of more than $10,000” will need to be reported. In short, there will be a new layer of significant crypto-sphere reporting requirements.
According to press reports, the move is part of a larger effort to crack down on the use of virtual currency to commit crimes. According to the President’s proposed American Families Plan, “[c]ryptocurrency already poses a significant detection problem by facilitating illegal activity broadly, including tax evasion.” This change in IRS policy follows on the Securities and Exchange Commission’s 2021 announcement concerning its enforcement priorities, at the top of which is use of and disclosures concerning cryptocurrency. Policy and regulatory announcements from the Departments of Justice and Treasury articulating the same priorities are also likely to follow.
Indeed, the Biden administration is signaling through the largest federal financial policing agencies that the $2 trillion cryptocurrency market is a major focus. Clients that utilize cryptocurrency are advised to obtain a copy of the newest regulations and implement them as soon as possible, and as applicable. Additionally, regulatory investigations are likely to increase as well, with possible criminal liability ramifications.
McGlinchey’s Financial Services team has deep cryptocurrency experience to assist with these issues, and our Government and Internal Investigations team is available to guide clients through the process and prepare clients proactively to deal with any investigation. Stay tuned for more news about the latest in cryptocurrency regulation and the government’s efforts to investigate and police the industry.