Binance, one of the world’s largest cryptocurrency exchanges, does not currently report to the IRS. However, this could change in the future as the IRS has been increasing its efforts to clamp down on cryptocurrency tax evasion.
Binance is not currently registered with the IRS as a Money Service Business, so it is not required to report transactions to the agency. However, this could change if Binance US registers with the IRS as a MSB.
The IRS has been increasing its scrutiny of cryptocurrency investors in recent years. In 2019, the agency sent out over 10,000 letters to taxpayers who had potentially failed to report their cryptocurrency gains on their taxes.
The letters warned that taxpayers could face fines and penalties if they did not amend their returns.
Binance US is a subsidiary of Binance and it is possible that it will register with the IRS as a MSB in the future. If it does, then it will be required to report transactions to the agency.
This would mean that US taxpayers who use Binance US would have to report their gains and losses on their taxes.
The bottom line is that we don’t know if Binance US will have to report to the IRS in the future. However, it is possible that it will have to do so if it registers as a MSB.
US taxpayers should be aware that they may need to report their gains and losses from Binance US on their taxes.