White House Proposes Crypto Tax Reporting for Overseas Accounts to Curb Evasion

The White House has proposed new legislation that would require U.S. taxpayers to report and pay taxes on cryptocurrency accounts held overseas, marking a significant step in the government’s efforts to expand financial oversight of digital assets. The initiative, detailed in a 168-page report by the Digital Asset Market Working Group, aims to close regulatory gaps and prevent tax evasion through offshore crypto holdings [1].

The proposal underscores the administration’s broader strategy to bring digital assets into a more structured and transparent financial framework. By mandating the reporting of overseas crypto accounts, the White House is aligning with longstanding concerns from regulators about the anonymity and cross-border nature of cryptocurrency transactions [2]. The report highlights that the lack of a robust reporting mechanism has created disadvantages for U.S. platforms and investors, and the new rules are intended to level the playing field [1].

This move follows recent actions by the IRS, which removed the “willfulness” checkbox from Form 14457. The change is interpreted as a shift toward a more comprehensive and mandatory approach to crypto reporting, emphasizing compliance over individual intent [3]. In addition, the IRS has offered transitional relief for certain reporting requirements, allowing taxpayers more time to adapt to the new regime [4].

The White House has also emphasized the need to curb offshore tax evasion, especially in the context of digital assets, which can be easily transferred and hidden from regulatory scrutiny. The proposed framework is a key part of a broader regulatory strategy aimed at reinforcing U.S. financial oversight and ensuring taxpayer compliance [5]. While the legislation is still under development, the administration is urging Congress to move swiftly in drafting the necessary legal provisions [1].

Analysts suggest that the proposal could reshape the crypto industry by making offshore tax avoidance less attractive and increasing accountability for U.S. taxpayers. The move is seen as part of a growing global trend toward formalizing crypto regulation, with the U.S. taking a leading role in setting transparency standards [6]. The White House has stressed that the initiative not only serves domestic interests but could also influence international crypto reporting norms [7].

Source:

[1] White House Wants Americans to Report, Pay Taxes on ...

https://decrypt.co/332718/white-house-report-taxes-foreign-crypto-accounts

[2] White House in crypto policy report calls for SEC action ...

https://ca.news.yahoo.com/white-house-set-unveil-closely-100450836.html

[3] IRS Removes Willfulness Checkbox from Form 14457, ...

https://www.jdsupra.com/legalnews/irs-removes-willfulness-checkbox-from-5876523/

[4] IRS Notice: Additional Transitional Relief for Certain ...

https://news.bloomberglaw.com/daily-tax-report/irs-notice-additional-transitional-relief-for-certain-information-reporting-obligations-irc-6045

[5] White House Proposes Crypto Reporting Framework to ...

https://www.ainvest.com/news/white-house-proposes-crypto-reporting-framework-curb-offshore-tax-evasion-2507/

[6] Crypto Tax Reporting: Urgent New Rules For Foreign ...

https://bitcoinworld.co.in/crypto-tax-reporting-rules/

[7] White House Proposal Aims to Boost US Crypto Market ...

https://decrypt.co/news-explorer?pinned=1114085&title=white-house-proposal-aims-to-boost-us-crypto-market-growth-prevent-tax-evasion