The IRS Extends Comment Period for Crypto Tax Reporting Rules
The United States Internal Revenue Service (IRS) has extended the comment period for proposed crypto tax reporting rules until November 13, 2023. The rules, titled “Gross Proceeds and Basis Reporting by Brokers and Determination of Amount Realized and Basis for Digital Asset Transactions,” were made public on August 29. They require brokers to use a new reporting form to simplify tax submissions and combat tax evasion.
The proposed Form 1099-DA aims to help taxpayers determine their tax obligations and avoid complex calculations or expensive digital asset tax preparation services. The rules are set to take effect in 2026, impacting sales and exchanges conducted in 2025.
Crypto Community Reacts to Proposed Rules
The crypto community has expressed dissatisfaction with the proposed tax rules. DeFi Education Fund CEO Miller Whitehouse-Levine criticized them as “confusing, self-refuting, and misguided.” Kristin Smith, CEO of the Blockchain Association, emphasized the differences between the crypto ecosystem and traditional finance.
Paul Grewal, chief legal officer at Coinbase, called on the crypto community to actively oppose the Treasury’s proposed regulations. He warned that these regulations would disadvantage digital assets and harm an emerging industry.
On the other hand, some members of the U.S. Senate, including Elizabeth Warren and Bernie Sanders, have urged the Treasury and IRS to expedite the implementation of crypto tax reporting requirements.
Hot Take: A Divided Response to Crypto Tax Reporting Rules
The IRS’s decision to extend the comment period for proposed crypto tax reporting rules reflects a divided response from various stakeholders. While some in the crypto community criticize the rules as confusing and detrimental to the industry’s growth, others see them as necessary for ensuring tax compliance and preventing evasion. The outcome of this ongoing debate will shape the future of crypto taxation in the United States and potentially impact the development of the nascent digital asset industry.
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