Crypto payments above $10,000 would be reported to IRS under Treasury plan

Although cryptocurrency is a small share of current business transactions, such comprehensive reporting is necessary to minimize the incentives and opportunity to shift income out of the new information reporting regime.Virtual currencies "have grown to $2 trillion in market capitalization," and the threat of illegal activity including tax evasion "is why the President's proposal includes additional resources for the IRS to address the growth of cryptoassets," the Treasury Department said. In a footnote, the Treasury Department cited a 2013 Michigan Law Review report that said, "To the extent that cryptocurrencies continue to gain momentum, we could reasonably expect tax evaders—who traditionally executed their tax-evasion techniques through the use of offshore bank accounts in tax-haven jurisdictions—to opt out of traditional tax havens in favor of cryptocurrencies."The Treasury Department said its tax enforcement plan "would more than double the IRS workforce over a decade," Reuters wrote yesterday."The IRS investment plan also would replace the Treasury's 1960s-era computer architecture with new machine-learning-capable systems that will be better able to detect suspect tax returns," Reuters wrote, adding that, according to the Treasury, the "IRS is the only federal agency with computers that run on the antiquated Common Business-Oriented Language (COBOL) system."