![]() ![]() Some of these rules, such as the financial account reporting, could require financial institutions to collect significantly more information from counterparties. Observation: The rationale for increased information reporting is rooted in several ‘tax gap’ reports that highlight that voluntary income tax compliance exceeds 90% when the IRS can verify taxpayer income information with third-party information reporting and withholding.Īction item: The proposals would give Treasury broad authority to issue regulations necessary to implement these proposals, if enacted, with some provisions proposed to become effective for payments as soon as January 1, 2022. The provisions related to crypto transactions represent a significant expansion of information reporting beyond traditional financial institutions, such as banks and brokers. The President’s budget proposals include creation of a comprehensive financial account information reporting regime under which financial institutions would be required to report information on account inflows and outflows to increase reporting on earnings from investments and business activity. Similar reporting requirements would apply to crypto asset exchanges, custodians, and payment settlement entities. Additional information reporting proposals also are outlined in the US Treasury’s report on the President’s ‘American Families Plan’ published on May 20. The Treasury Department on May 28 published its Green Book providing details of tax proposals included in President Biden’s FY 2022 budget submission to Congress.
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