Coinbase Calls for Revision of IRS Proposed Crypto Tax Reporting Guidelines
Coinbase’s Vice President of Tax, Lawrence Zlatkin, has urged the US Internal Revenue Service (IRS) to revise its proposed crypto tax reporting guidelines. In a letter, Zlatkin criticized the rules for infringing on user privacy and creating an unfair advantage for traditional finance. The IRS’s guidelines, unveiled in August by the Biden Administration, require crypto brokers to register new information on users’ transactions with the agency within two years. They also address the definition of a “broker” in the crypto industry and outline tax reporting obligations for companies and investors. Despite some lawmakers calling for swift implementation, Zlatkin argues that the rules would lead to excessive government surveillance and burdensome reporting requirements.
US Lawmakers Push for Faster Implementation
A group of seven US senators has urged the IRS and Treasury Department to implement the proposed tax reporting guidelines sooner rather than later. The senators argue that quick implementation is necessary to prevent potential loss of billions in annual tax revenue. The guidelines are scheduled to take effect in 2026 for 2025 transactions.
Zlatkin Disagrees with Proposed Rules
In his letter, Zlatkin expressed concerns about the rules requiring government surveillance and imposing burdensome reporting requirements on Americans. Coinbase, currently facing a battle with the SEC, is calling for a revision of the regulations to align them with the practices of the traditional finance sector. The exchange also requested sufficient time to develop compliance systems and explore blockchain solutions for tax reporting.
Zlatkin highlighted six key issues with the proposed guidelines:
- Lack of parity with financial services
- Duplicative and burdensome reporting
- Invasion of privacy
- Violation of tech neutrality
- Unrealistic compliance timeline
- Missed opportunity to leverage blockchain for taxpayer compliance
Hot Take: Coinbase Urges IRS to Revise Proposed Crypto Tax Reporting Guidelines
Coinbase’s Vice President of Tax, Lawrence Zlatkin, has called on the IRS to revise its proposed crypto tax reporting guidelines due to concerns over user privacy and an uneven playing field with traditional finance. The guidelines, set to take effect in 2026, have faced criticism for their potential infringement on privacy and burdensome reporting requirements. While some US lawmakers advocate for swift implementation to prevent revenue loss, Zlatkin argues that the rules would lead to excessive government surveillance. Coinbase also requests a revision of the regulations to align them with traditional finance practices and adequate time for compliance system development. Zlatkin highlights six critical issues with the proposed guidelines, emphasizing the need for a more balanced approach.
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