The IRS is keeping a closer eye on gains in cryptocurrency, and the tax risks are expanding with new reporting requirements.
Treasury recently announced plans to impose new reporting requirements for cryptocurrency. Soon, banks and financial institutions will have to report crypto information to the IRS. Exchanges, custodians, and crypto payments services may have to report to the IRS too.
For the purposes of the forthcoming rules, crypto sounds akin to cash. Financial experts expect the new rules to say that businesses receiving more than $10,000 in cryptocurrency would have to file a current transaction report.
If the new crypto reporting threshold goes the same way cash reporting has, there may be new tax risks on the horizon. The best way taxpayers can avoid penalties or worse is to disclose and report their crypto gains as accurately as they can.