A Republican parliamentarian from Ohio is drafting a law that is said to be aimed at preventing US citizens from evading taxes on their crypto income.
In an interview with CNBC Squawk Box today, Senator Rob Portman said he hopes to introduce a bipartisan bill after the upcoming congressional recess that will address the problem that many US cryptocurrencies do not pay taxes. The senator said lawmakers “have not yet finalized the bill” and “are still gathering information” on the issue. However, he has argued that both Republicans and Democrats are interested in continuing to narrow the tax gap for cryptocurrencies.
“The idea is to have better information reporting on cryptocurrencies and better define them for tax purposes,” said Portman. “There is now […] a trillion dollar tax difference. Part of that tax gap may be related to the cryptocurrency issue.”
According to the IRS, in October, 83.6% of the tax was paid “voluntarily and on time” from 2011 to 2013. During this period, the United States government lost an average of about $ 400 billion annually. …
Portman referred to the proposed law at a Senate Finance Committee hearing last Tuesday, where he appealed to Tax Commissioner Charles Rettig. The commissioner said providing proper reporting rules for cryptocurrencies would “absolutely” help bridge the tax gap.
At the time, Rettig indicated her role in adding a question to the 2019 tax return form where the archive asked if they had received, sold, sent, or exchanged any financial interest in cryptocurrencies. He added that some aspects of the cryptocurrency world are “invisible by design,” including non-exchangeable tokens.
Other U.S. lawmakers have sought to establish reporting standards for tax cryptocurrencies as technology has become a more prominent part of the wallets. Last year, two House members introduced the Equality in Virtual Currency Tax Act of 2020, a bill that aims to create an exemption for cryptocurrencies that are considered personal transactions.