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. 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 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. The provisions related to crypto transactions represent a significant expansion of information reporting beyond traditional financial institutions, such as banks and brokers.
The tax compliance measures outlined in the American Families Plan and the Green Book focus on increased funding for the IRS and significant expansion of third-party information reporting obligations. The proposed reporting obligations would have a significant impact on traditional financial institutions, payment settlement entities, and the naisant crypto exchanges and wallet hosting organizations.
