White House Proposal Aims to Enhance IRS Access to Offshore Crypto Data
The White House is considering a proposal that would grant the Internal Revenue Service (IRS) access to data on U.S. taxpayers’ digital asset activities conducted through foreign platforms. This move is part of a broader effort to improve tax compliance and oversight in the cryptocurrency space. 
Will the White House proposal give the IRS broader access to offshore crypto data as authorities push for stricter tax oversight?
Key Points of the Proposal
- The White House is considering a proposal that would allow the IRS to access U.S. taxpayers’ crypto activities on foreign platforms.
- The move follows an earlier administrative report that recommended alignment with global reporting standards to improve tax compliance.
- The White House emphasized that any new rules should avoid additional reporting burdens for decentralized financial transactions.
Background and Context
The proposal was received by the Office of Information and Regulatory Affairs on Friday. The office, which reports to the parent Office of Management and Budget, evaluates federal regulations to ensure they are consistent with the president’s policy goals. This move follows a detailed report on digital assets released earlier this year, which addressed gaps in crypto oversight and tax compliance.
One of the report’s recommendations called for the IRS and Treasury to consider rules consistent with the Crypto-Asset Reporting Framework, an international standard designed to improve tax transparency. Under this framework, digital asset service providers would be required to share transaction information with regulators to help authorities identify offshore activities.
Implications and Potential Impact
The White House argued in its report that adopting the framework would reduce incentives for U.S. taxpayers to move assets to offshore exchanges and could support healthier domestic market activity. It also said such alignment would help prevent the U.S. from falling behind jurisdictions that already use similar reporting standards. However, the report noted that expanded rules should avoid imposing additional reporting requirements on decentralized finance transactions, suggesting that DeFi activities should remain outside the scope of the proposal.
For more information on this development and its potential implications for the cryptocurrency space, visit https://crypto.news/white-house-review-irs-offshore-crypto-reporting-rule/
