America’s president Joe Biden is determined to go after people using cryptocurrencies as a means to evade tax.
His administration has laid down a blueprint to hunt down offenders in the USA, and to some extent, those outside the shores of the country.
“Since the industry is entirely digital, taxpayers can transact with offshore crypto exchanges and wallet providers without leaving the United States. The global nature of the crypto market offers opportunities for US taxpayers to conceal assets and taxable income by using offshore crypto exchanges and wallet providers.” the Treasury said.
The new policy will compel exchanges and wallet providers based in the USA to submit some details of their foreign customers to the Internal Revenue Service.
The aim is to create a global database of information about crypto investors that will be accessible to tax authorities across the world.
“In order to ensure that the United States is able to benefit from a global automatic exchange of information framework with respect to offshore crypto assets and receive information about US beneficial owners it is essential that the United States reciprocally provide information on foreign beneficial owners of certain entities transacting in cryptoassets with American brokers.”
Tax officials from different countries will be able to trade information about investors within themselves.