April 19, 2024
The IRS reveals draft regulations aimed at curbing tax evasion
Latest Cryptocurrency News

IRS Unveils Proposed Rules to Curb Tax Evasion in Digital Asset Trading

The United States Internal Revenue Service (IRS), the body responsible for collecting taxes, has introduced suggested regulations concerning the trading and swapping of digital assets through brokers. According to the proposed regulations, brokers would need to employ a novel form for reporting purposes, aiming to simplify tax submission procedures and reduce instances of tax evasion.

The suggested Form 1099-DA is intended to “help taxpayers determine if they owe taxes and avoid having to make complicated calculations or pay digital asset tax preparation services in order to file their tax returns,” as stated in an announcement by the Treasury Department. The statement also remarked that “under current law, taxpayers owe tax on gains and may be entitled to deduct losses on digital assets when sold, but for many taxpayers, it is difficult and costly to calculate their gains. 

The preliminary proposal, slated to be published in the Federal Register on August 29, spans 282 pages. It is a component of the Biden administration’s implementation of the bipartisan Infrastructure Investment and Jobs Act (IIJA), as detailed by the Treasury. The IIJA provisions are anticipated to generate $28 billion in fresh tax revenue over a decade. The proposed regulations are slated for implementation in 2026 to encompass sales and swaps carried out in 2025. The public is invited to submit written comments on the proposal until October 30, and subsequent to that date, at least one public hearing will be organized.

These regulations are designed to align reporting for digital assets with reporting requirements for other forms of assets, as indicated by the Treasury.

Based on the initial response to the proposal, it seems that the IRS will receive a considerable number of comments to address. Kristin Smith, CEO of the Blockchain Association, an industry advocacy group, issued a statement stating, “It’s important to remember that the crypto ecosystem is very different from that of traditional assets, so the rules must be tailored accordingly and not capture ecosystem participants that don’t have a pathway to compliance. Smith also expressed eagerness on behalf of the group and its members to provide their feedback.

According to a Reuters report, DeFi Education Fund CEO Miller Whitehouse-Levine commented, Today’s proposal from the IRS is confusing, self-refuting, and misguided. It attempts to apply regulatory frameworks predicated on the existence of intermediaries where they don’t exist.

Image by succo from Pixabay

Related posts

Institutional ETH Staking Launched in the UK by Winklevoss Twins’ Gemini

Henry Clarke

May Brings Hope for Ether ETF Approval

Christian Green

CBN Collaborates with Gluwa Nigeria to Boost eNaira Adoption and Financial Inclusion

Anna Garcia

This website uses cookies to improve your experience. We'll assume you're ok with this, but you can opt-out if you wish. Accept Read More