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Commissioner Rettig Asks Congress for More Tools to Regulate Cryptocurrency

Thomson Reuters Tax & Accounting  

Thomson Reuters Tax & Accounting  

In June 8 testimony before the Senate Finance Committee, IRS Commissioner Charles Rettig covered a number of subjects including his requests for legislation that would provide IRS with more tools to regulate cryptocurrency and for the ability to hire new employees expeditiously.

Request for more tools to regulate cryptocurrency.

The Biden administration’s fiscal 2022 revenue proposals include a new requirement that cryptocurrency transfers of $10,000 or more be reported to IRS in much the same way that banks report cash transfers of that amount and brokers report securities transactions to IRS. The proposed change would start in 2023. See Biden administration fleshes out its proposals to increase tax compliance.

Commissioner Rettig emphasized the need for Congressional action on this subject. “I think we need congressional authority,” Rettig said. “We get challenged frequently, and to have a clear dictate from Congress on the authority for us to collect that information is critical.”

Request for ability to hire new employees expeditiously.

Rettig noted that Congress is considering a $1.2 billion increase in IRS’s fiscal year 2022 budget and that President Biden has proposed a much larger increase for future years. He notes that IRS has already geared itself up to do the necessary hiring for fiscal year 2022 and will be ready to begin the process as soon as Congress approves IRS’s funding.

“We will hire enforcement staffing to support our base enforcement functions but also hire a balanced mix of staffing, including employees in our research division, our Criminal Investigation division, Chief Counsel, Appeals and the Taxpayer Advocate Service.”

Biden administration’s proposals to improve tax administration.

Rettig also discussed aspects of President Biden’s legislative proposals other than those involving cryptocurrency. For example, he commented on increasing oversight of paid tax return preparers, increasing penalties on ghost preparers (i.e., persons who are compensated for preparing returns but don’t identify themselves as preparers), increasing financial account information reporting, expanding the authority to require electronic filing of forms and returns, improving the reporting of payments subject to backup withholding, and creating IRS Funds whose purpose would be to achieve costs savings, economies of scale, etc.

ProPublica’s reporting of tax information of high earners.

On June 8, news outlet ProPublica published “The Secret IRS Files: Trove of Never-Before-Seen Records Reveal How the Wealthiest Avoid Income Tax.” Rettig stated that IRS is conducting an investigation into any potential disclosure breach. “We have turned it over to the appropriate investigators, external and internal,” Rettig said.

 

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