IRS Requests Congress Approval to Collect Cryptocurrency Transfers Data

Alleging a supposed fight against tax evasion, the Internal Revenue Service requested on Tuesday that Congress grant it authority to collect data on transfers, in a campaign to increase oversight over cryptocurrency deals, Bloomberg reports.

U.S. federal tax agency’s head Charles Rettig argued on Tuesday that his service is frequently challenged in the field of cryptocurrency operations and pointed that having a “clear dictate from Congress” allowing it to collect the relevant information is critical.

In testimony to the Senate Finance Committee, Rettig said that most cryptocurrencies are designed to stay off the radar screen so IRS feels challenged and in need of congressional authority and additional resources. He added that cryptocurrency market capitalization has grown to over $2 trillion as it includes more than 8,600 exchanges worldwide.

President Biden’s administration has previously suggested obliging cryptocurrency brokers, including exchanges, to report information on their clients, including foreign investors with the Treasury Department proposing budget for next year that includes $32 million for crypto-related enforcement operations. Proposal also includes a measure that would require businesses to report all crypto assets worth more than $10,000.

Since it expects cryptocurrency to rise in importance in the near future, U.S. Treasury plans to raise $700 billion over the next decade through new tax enforcement measures, including enhanced cryptocurrency reporting requirements.

Back in March, IRS announced its “Operation Hidden Treasure” aimed at uncovering unreported crypto-related income and fighting cryptocurrency fraud while in May it started investigating potential cryptocurrency-related tax evasion cases.

The operation, which later faced lawsuits alleging that the agency’s actions violate the Constitution’s Fourth Amendment prohibiting unlawful search and seizure, requested information on large transactions that could be subject to U.S. taxes from crypto exchanges through court summonses.

It seems that the Congress is more than willing to help the IRS  with senator Rob Portman (R-Ohio) saying that Congress would like to work with the agency and grant it such authority.

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