Crypto Tax Rule Feedback Window Stretched: IRS Delays Deadline To Mid-November

The open-comment period for the proposed crypto tax reporting regulations the U.S initially introduced. The IRS extended it in Aug 2023. The public consultation will now continue until Nov 13.

On Aug 29, the rules regarding “Gross Proceeds and Basis Reporting by Brokers and Determination of Amount Realized and Basis for Digital Asset Transactions” were publicly released. These regulations will require brokers to utilize a new reporting form. The aim is to streamline tax returns and reduce instances of tax evasion.

A statement from the U.S. Treasury Department mentions that the proposed Form 1099-DA aims to assist taxpayers in determining their tax obligations and alleviate the need for complex calculations or reliance on digital asset tax preparation services for filing tax returns. Once implemented in 2026, these regulations will impact sales and exchanges made during 2025.

Concerns Raised Over Delay In Crypto Tax Regulations

The cryptocurrency community expressed disapproval towards the proposed tax laws. Miller Whitehouse-Levine, CEO of DeFi Education Fund, criticized them as “confusing, self-refuting, and misguided,” while Kristin Smith, CEO of the Blockchain Association, highlighted the differences between the traditional financial system and the cryptocurrency environment.

Paul Grewal, the chief legal officer of cryptocurrency exchange Coinbase, has called upon the cryptocurrency community to actively participate in opposing the Treasury’s proposed legislation.

Additionally, in his statement, he expressed concern that if these regulations are enforced as law, it could result in digital assets facing disadvantages and pose a threat to an emerging industry in its infancy stage.

Members of the U.S. Senate are currently urging the Treasury and the IRS to create a rule with utmost efficiency promptly. However, Voicing their concerns, Elizabeth Warren, Bernie Sanders, along with five other senators, have expressed their dissatisfaction over a proposed two-year delay in implementing cryptocurrency tax reporting regulations.

The author’s views are for reference only and shall not constitute any investment advice. Please ensure you fully understand and assess the products and associated risks before purchasing.