| The OECD jumps in
Crypto has also increasingly become a focus for tax regulators outside the U.S.
The Organisation for Economic Co-operation and Development (OECD), which consists of 38 countries with market-based economies, publishes economic policy recommendations.
The group recently requested public comments for its Crypto-Asset Reporting Framework, which would require crypto exchanges to share information with tax authorities.
The OECD is looking for greater transparency—stating “crypto-assets could be exploited to undermine existing international tax transparency initiatives.”
The rules would require crypto exchanges to share information with tax authorities, and they would apply to various jurisdictions. When the OECD released its public consultation document on the Crypto-Asset Reporting Framework, more than 100 jurisdictions had adopted the Common Reporting Standard, or CRS.
I spoke with Joshua Tompkins, managing director, Washington National Tax, KPMG LLP, who said:
“These rules would be coordinated with an expansion of the Common Reporting Standard to cryptoassets and are another indication – in addition to the recently released Biden administration executive order – that crypto is increasingly an area of focus for regulators and is here to stay.”
The proposal would require any exchange, retail transaction or transfer of tokens—in either hot or cold wallets—to be reported within 12 months from the effective date of the rules to comply with the reporting requirements.
And there's more ahead next year As the U.S. government looks for funds to pay for the massive Infrastructure Investment and Jobs Act, one of the places they will look is crypto. Failure to comply with the above-stated rules could result in criminal and civil penalties.
In addition to the recent actions taken by the IRS, the Financial Crimes Enforcement Network (FinCEN) proposed requiring financial institutions to report any transactions involving "convertible virtual currency" or "digital assets with legal tender status" "greater than $10,000, or aggregating to greater than $10,000, that involve unhosted wallets or wallets hosted in a jurisdiction identified by FinCEN."
As they say - the only things in life that are certain are death and taxes.
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