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As the administration seeks new revenue streams, additional criteria for crypto companies may be imposed.
According to reports, the US Department of the Treasury will attempt to broaden the scope of new rules designed to oversee the cryptocurrency space. The impending budget reconciliation bill, which may include new restrictions for bitcoin businesses, will be closely followed by the infrastructure package, which is laden with last-minute crypto taxing provisions.
Citing an unnamed official within the Biden administration, Roll Call reported on Monday that the administration is looking to append provisions to the budget bill requiring U.S. digital asset firms report information on their foreign clients.
As with the infrastructure bill, the purpose of the potential regulation is to enhance tax compliance and boost tax revenues at the expense of the crypto industry. As per the official’s account, the U.S. government would then exchange the data on foreign nationals’ cryptocurrency-related activity with the respective governments to obtain information on U.S. citizens’ crypto operations overseas.
This information would be then used to improve tax compliance.
Turning to the crypto sector for new sources of revenue is one of the measures suggested within the Improving tax administration rubric of Treasury’s strategic Revenue Proposals or the fiscal year 2022.
The prospective data sharing provisions, along with other proposed means of closing the “tax gap” — the difference between what taxpayers owe the government and what they actually pay — are aimed at helping Democrats fund the ambitious budget package, which is expected to include massive social welfare and healthcare expenditures.