Senators Urging IRS and Treasury Department to Implement Crypto Tax Reporting Requirements
Sen. Elizabeth Warren, along with several other senators, is urging the Internal Revenue Service (IRS) and the Treasury Department to implement tax reporting requirements for crypto brokers as quickly as possible. The senators expressed concerns about potential delays in the implementation of the rules, citing the Treasury’s previous delay of almost two years. They believe that implementing the proposed rule without further delay would prevent industry efforts to evade regulation, provide clarity to law-abiding taxpayers, and generate significant tax revenue from an industry known for tax avoidance.
In a letter dated October 10th, the senators addressed IRS Commissioner Daniel Werfel and Treasury Secretary Janet Yellen, emphasizing the importance of timely action on this issue.
New Rules Proposed by the Treasury and IRS
In August, the Treasury and IRS proposed new tax reporting rules for cryptocurrencies. These rules would treat crypto brokers similarly to brokers for traditional investments like stocks and bonds. The regulations would require brokers to provide crypto users with the necessary information to file their taxes and mandate brokers and exchanges to report specific sales of crypto.
The proposed regulations were a result of the Infrastructure Investment and Jobs Act passed in 2021, which included provisions related to increased reporting by brokers on customers’ crypto activity.
Concerns About Delayed Implementation
The senators expressed their support for the substance of the proposed regulations but raised concerns about potential delays in their implementation. They fear that waiting until 2026 for the final rule to take effect could undermine efforts to regulate the industry effectively.
Sens. Angus King, Richard Blumenthal, Bernie Sanders, Sheldon Whitehouse, Brian Schatz, and Gary Peters also signed the letter alongside Sen. Elizabeth Warren.
Upcoming Public Hearing and Comments
A public hearing on the proposed regulations is scheduled for November 7th. The Treasury Department has stated that it is carefully considering comments received on the rules, with approximately 140 comment letters submitted thus far. The deadline for submitting comments is at the end of October.
Hot Take: Urgent Implementation of Crypto Tax Reporting Rules
The senators’ call for the rapid implementation of tax reporting requirements for crypto brokers highlights their concern about potential delays and the need to combat industry efforts to evade regulation. By implementing these rules promptly, the government can provide clarity to law-abiding taxpayers and generate significant tax revenue from an industry known for tax avoidance. The upcoming public hearing and comment period provide an opportunity for stakeholders to voice their opinions and shape the final regulations.
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