The U.S. Treasury said the Biden administration’s proposal to strengthen tax compliance includes a requirement for transfers of at least $10,000 of cryptocurrency to be reported to the Internal Revenue Service.
“As with cash transactions, businesses that receive crypto-assets with a fair-market value of more than $10,000 would also be reported on,” the Treasury Department said in a report on tax-enforcement proposals released Thursday.
The Treasury said that comprehensive reporting is necessary “to minimize the incentives and opportunity to shift income out of the new information reporting regime.”
It noted that cryptocurrency is a small share of current business transactions.
Bitcoin pared a daily advance after the IRS announcement, which shaved about $3,000 from the token’s price. It was up 5.7%, at $40,530 as of 4:23 p.m. on Thursday in New York.
Cryptocurrency-linked stocks like Coinbase and MicroStrategy also gave up some of their gains immediately after the news, which had also prompted an outcry from some digital-coin enthusiasts on Twitter.
“There was some major overreaction,” said Kristin Smith, executive director of the Blockchain Association trade group. “For those of us that believe we should try to keep crypto on par with how cash is treated – this does just that.”