Treasury wants more reporting to the IRS on offshore crypto accounts

The US Treasury is working to get the IRS more information on offshore cryptocurrency holdings.

On March 28, the US Treasury released its “Green Book,” its annual breakdown of the budget, which the Biden administration put out earlier Monday. 

In the Green Book, the Treasury put forward a proposal that would extend to digital assets a longstanding rule requiring US persons to report foreign financial accounts worth more than $50,000. 

“Tax compliance and enforcement with respect to digital assets is a rapidly growing problem. Since the industry is entirely digital, taxpayers can transact with offshore digital asset exchanges and wallet providers without leaving the United States,” the proposal explained. 

The Treasury’s proposals also include an effort to apply the Foreign Account Tax Compliance Act to US-based exchanges holding accounts for foreign users. Particularly, it would require brokers — depending on a contentious definition that appeared in last year’s Infrastructure Act — to report substantial foreign ownership of crypto assets.  

The changes, if approved, would in theory take effect at the beginning of 2023. However, the budget has seen delays to its passage in Congress grow increasingly commonplace in recent years.