The US Treasury Department and IRS are pushing for stricter reporting rules on cryptocurrency exchanges. The aim? To bridge the gaping digital asset tax chasm. 🌉
The proposed regulations, set to kick off in 2026, are part of the Biden administration’s broader strategy to clamp down on potential tax dodgers in the crypto realm. Remember the 2021 rules aimed at curbing tax evasion? Those were projected to boost tax revenues by a cool $28 billion over a decade.
Now, with the IRS pointing fingers at unpaid digital asset taxes as a major contributor to the $500 billion annual tax gap, the heat is on. Platforms like $COIN and Kraken will soon be in the spotlight, tasked with tracking and disclosing users’ capital gains and losses, much like traditional stock and bond broker-dealers. 📊
While the initial plan was to have exchanges start their meticulous record-keeping by 2023, Uncle Sam has hit the pause button until the final framework is rolled out. Instead, the focus will shift to reporting gross proceeds from crypto sales starting January 2025 and by January 1, 2026, for adjusted basis reporting.
This isn’t just for the big centralized players; decentralized exchanges are also on the hook. 🚀