In a hearing before the Senate Finance Committee, the Internal Revenue Service (IRS) commissioner, Charles Rettig, said that the IRS needs more authority from the US Congress to regulate cryptocurrencies.
The IRS wants congressional authority to require reporting on crypto transactions, in a bid to increase tax collections from crypto users and hodlers.
“We get challenged frequently, and to have a clear dictate from Congress on the authority of us to collect that information is critical.” Said Rettig
Rettig said that the crypto market capitalisation is over $2 trillion, with more than 8,600 crypto exchanges throughout the world:
“By design, most crypto virtual currencies are designed to stay off the radar screen.”
The Biden administration has been cracking down on cryptocurrencies, having proposed requiring crypto exchanges to report on their customers. Just last month, the Treasury Department called for crypto brokers, exchanges, and custodians to report transactions that exceed $10,000 to the IRS. This further requires businesses to report when they receive digital assets worth more than $10,000.
Rettig revealed that the IRS currently relies on the method of issuing a summons to a third party to gather information on crypto users, without mentioning specific individuals’ names. Rettig implied that this method is largely ineffective, as the agency needs additional tools and resources from Congress.
“We do need additional tools, and we absolutely need additional resources.”
Feature image by Harkirat Singh from flickr