Title: Delays in Pursuit of Cryptocurrency Tax Evasion Leave Billions of Dollars in Federal Revenue at Risk
Date: August 3, 2023
Delays within the U.S. Treasury Department on a law aimed at pursuing tax evasion in cryptocurrencies have put billions of dollars in federal revenue at risk and disappointed members of the president’s political party.
The Treasury Department has previously missed the first deadline to implement a law passed in 2021 in time for the current tax year. Unfortunately, due to further delays, it may now also be too late to implement the law in the 2024 tax year.
This delay leaves a related loophole open, making it easier for cryptocurrency investors to avoid taxes. If this loophole were closed, it could potentially raise an estimated $28 billion over 10 years. However, this figure may have changed given the falling prices of cryptocurrencies. The aim of this tax rule is to subject cryptocurrency investors to the same tax rules as everyone else.
Concerned about the implications of this delay, Senator Elizabeth Warren (D-Massachusetts) and three other senators are urging the Biden administration to take prompt action. They believe that tax evaders may already be exploiting the existing loopholes and are urging the administration to address this issue urgently.
“These new rules were already urgent when President Biden signed them into law in 2021. The urgency has only increased over the past two years,” stated Senator Warren. In a letter addressed to Treasury Department officials, Senators Bob Casey, Richard Blumenthal, and Bernie Sanders emphasized the need to close these loopholes to prevent tax dodgers and cryptocurrency brokers from exploiting the system and diverting billions of dollars from the government.
The letter, reviewed by The Wall Street Journal, stated, “Given the opportunity, tax dodgers and cryptocurrency brokers willing to help them will continue to game the system, take advantage of loopholes, and send money out of the U.S. Billions of dollars are being siphoned off by these individuals. They must not be given that opportunity.”
The delay within the U.S. Treasury Department has not only put billions of dollars in federal revenue at risk but has also disappointed members of the president’s political party who were counting on this law to be implemented promptly. As the cryptocurrency market continues to expand, it is crucial for the government to address these tax evasion concerns and ensure a fair and equitable tax system for all.