According to sources, a Republican senator in Ohio is drafting bills that would impose tighter regulations on cryptocurrency transactions in order to deter tax evasion.
Senator Rob Portman stated he expected the bill would get bipartisan support as a move to combat the issue of undeclared digital currency trade profits in the latest example of potential strengthening of the laws surrounding digital currency profits.
Though he acknowledged that the bill was still in its initial stages and that further analysis was required to compile data on the best way, he stated that both Democrats and Republicans had voiced support for legislation to narrow the cryptocurrency tax gap.
“The idea is to have better information reporting on cryptocurrency, and to define it better for tax purposes. There is…a trillion-dollar tax gap right now. Some of that tax gap is attributable to the cryptocurrency issue,” Portman informed CNBC’s Squawk Box.
From 2011 to 2013, 83.6 percent of taxes were collected “voluntarily and on time,” as per IRS statistics. Nevertheless, this represents a loss of up to $400 billion over the duration, and it is expected that taxable cryptocurrency profits will be disclosed to the government even less regularly in the future.
IRS Commissioner Charles Rettig expressed support for the measure, saying that clarifying reporting provisions in the legislation would surely assist in reducing the tax gap.
Rettig continued saying that certain aspects of the digital currency industry remain opaque by design, implying that regulation to increase clarity around taxable digital currency profits was necessary.
Ohio’s proposed legislation is also the latest in a series of moves taken by politicians in the United States and elsewhere to tighten the laws around tax reporting on digital currency earnings. Before starting its legislative process, the bill is likely to take considerable time.
