Tax gap reduction refers to government efforts aimed at minimizing the difference between the amount of tax legally owed and the amount actually collected. This involves implementing measures to improve compliance, enhance reporting, and deter tax evasion. In the context of digital assets, new regulations requiring transaction reporting seek to close this gap by increasing visibility for tax authorities. It is a fiscal policy objective.
Context
The expansion of tax information reporting requirements for digital assets is a direct strategy for tax gap reduction, particularly in jurisdictions like the United States. A key discussion centers on the practicality and effectiveness of these new rules in capturing previously unreported crypto income. Future legislative actions and regulatory guidance will continue to target this objective, seeking to ensure equitable tax collection from digital asset activities.
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