Uncle Sam wants a piece of your cryptocurrency, and he is not afraid to put some effort into getting his share. At least that was the message of a recent report released by the United States Treasury Department. According to the release, the feds are investing in their tax enforcement efforts and focusing in on cryptocurrency. Their goal: to find taxpayers who are trying to hide their assets to avoid tax obligations.
Where is the funding coming from?
The funding is part of President Joe Biden’s American Families Plan. It calls for an investment of $80 billion to go towards these efforts. This will fund the Internal Revenue Service (IRS) and help the agency hire staff and update their tech. In addition to digging into cryptocurrency reporting, the plan also calls on financial institutions to report inflows and outflows to the IRS.
The plan has big goals. According to recent estimates, the feds foresee these changes leading to $700 billion in tax gains in the first decade and over $1.5 trillion the second.
What does this mean for you?
Taxpayers who are concerned that they may not be meeting their tax obligations or properly reporting their assets are wise to take a moment to run an internal audit. Review your filings and make sure you comply with applicable tax regulations. These requirements are not easy to follow, but the feds are much more likely to work with taxpayers who are trying to do it right than those who could be seen as trying to hide something. The attorneys at Goldburd McCone are familiar with these obligations and can review your taxes and discuss your compliance options.