The IRS asks Congress for authorization to regulate cryptocurrencies and will expand the crypto tax enforcement budget and hire experts and contractors to provide support

At a Senate Finance Committee hearing on June 8, IRS Commissioner Charles Retting asked Congress to authorize the regulation of cryptocurrencies. Retting said, "We need more tools, we need additional resources." Retting added that the United States "hopes" to work with Congress. As of press time, according to Bitpush terminal data, the price of Bitcoin has fallen to $33,539, a daily drop of 2.79%.

Due to the recent unrest, Congress has no time to waste in authorizing the regulation of cryptocurrencies. Retting pointed out that "recently, the global market value of cryptocurrencies has reached $2 trillion, and there are 8,600 exchanges. It is precisely because cryptocurrencies can easily evade regulation that they have caused us endless trouble." The IRS has also issued multiple John Doe subpoenas to collect information on cryptocurrency users.

As a result, the IRS will expand crypto tax enforcement and will also hire external experts to assist in regulating cryptocurrencies.

The IRS's fiscal year 2022 budget report shows that the fiscal year 2022 budget is $13.2 billion, an increase of $1.2 billion from fiscal year 2021. In terms of the enforcement budget, the IRS requested $5.46 billion, an increase of $458 million year-on-year. The IRS also added $32 million to its ongoing encryption and network operations, including funds for external professionals and building a complete internal dashboard for cryptocurrency and blockchain analysis. The report stated, "At the Western CCU of IRS-CI, professional contractors assisted in the development work to build an internal CI-owned dashboard called SRTIKES for cryptocurrency/blockchain analysis. This tool brings together all the power of existing products and brings out their respective strengths." Of the $32 million budget, $23 million will be invested in "contractor services." The project will launch a "One-IRS" approach to combat all violations in the crypto market.

The fiscal year budget report is much more detailed than the federal budget green paper released by the Biden administration at the end of May. As early as April this year, Charles Retting, director of the IRS, proposed to Congress that the regulation of cryptocurrencies could help narrow the tax gap. Ohio Senator Rob Portman responded that legislation in this area is being developed, but no relevant bills have been announced so far.

The fiscal year budget report hints at the coming of crypto transaction information audits. The IRS declined to comment, saying any proposed adjustments would need to be made before the report is finally approved, and all other requirements will take effect after December 31, 2022.