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The payments landscape for community banks is changing rapidly as traditional payments converge with new instant payment systems and emerging cryptocurrencies. It is critical for Community Banks to maintain awareness of developments in the payments space to assess new opportunities, mitigate risks, and ensure that their payment strategy aligns with overall business plans.
July 17, 2024
Digital asset seizure values have grown exponentially, topping $7 billion in 2022, but compliance enforcement with virtual currency is difficult, according to a new Treasury Department report.
Highlights: The Treasury Inspector General for Tax Administration report found:
The number of types of virtual currency grew from 5,000 in April 2020 to more than 26,000 as of July 2023.
2.7 million people in 2022 checked the 1040 box indicating they received, sold, sent, or exchanged crypto, but the report notes challenges with identifying taxpayers with digital assets transactions due to a lack of third-party reporting.
Between 2018 and 2023, the IRS Criminal Investigation unit saw a 113% increase in cases involving digital assets.
New Reporting Rule: The Treasury Department and IRS recently released a final rule establishing reporting requirements for brokers of digital assets with ICBA-advocated provisions to promote a level playing field.
ICBA in 2023 submitted a comment letter to the IRS supporting the digital asset broker rule, saying it would dispel questions about the tax treatment of digital assets.
In a separate comment letter earlier this year, ICBA said recordkeeping and reporting requirements on crypto transactions are not enough to adequately protect U.S. consumers and businesses.