The Biden administration is proposing to introduce global crypto data sharing rules in the upcoming budget package of $3.5 trillion, according to a report. The aim of this proposal is to provide tax compliance on crypto transactions.
According to the US Treasury Department, the crypto businesses are required to file the details on foreign account holders to share that information with the global trading partners of the US.
A report published by the Treasury Greenbook stated, “The global nature of the crypto market offers opportunities for U.S. taxpayers to conceal assets and taxable income by using offshore crypto exchanges and wallet providers. U.S. taxpayers also attempt to avoid U.S. tax reporting by creating entities through which they can act. To combat the potential for crypto assets to be used for tax evasion, third party information reporting is critical to help identify taxpayers and bolster voluntary tax compliance.”
In order to get access to the crypto account holders’ details of foreign countries, the US would also need to provide the same information to them.
This kind of information exchange is referred to as the “tax information exchange agreements.”
The US administration decided to bring in the new law soon after the Senate House passed the $1.2 trillion infrastructure bill.