U.S. Legislators Push for Revision of Proposed Crypto Tax Laws

• US Lawmakers Urge Treasury to Rethink Proposed Crypto Taxation Regime
• Congressional Leaders Spearhead the Effort
• Treasury's Proposed Crypto Tax Rule
• The Issue with the Definition of 'Broker'
• Industry's Response to the IRS Proposed Broker Rule

US Lawmakers Urge Treasury to Rethink Proposed Crypto Taxation Regime

A bipartisan group of U.S. lawmakers has requested the Treasury to revise its proposed digital-assets taxation regime. These representatives support the views of cryptocurrency experts and lawyers who label the proposed taxation scheme as a dangerous and improper overreach.

Congressional Leaders Spearhead the Effort

Patrick McHenry (R-NC), the Chairman of the House Financial Services Committee, and Congressman Ritchie Torres (D-NY) led an assembly of nine lawmakers. They deemed the tax reporting requirement as unworkable.

They voiced their concerns in a letter made public on November 10. In it, they argued that the proposed regulation's broad definition of a digital asset broker, ambiguous definition of a Digital Asset, and the brief window for public comments could jeopardize the existence of a significant portion of the digital asset ecosystem in the United States.

Treasury's Proposed Crypto Tax Rule

The crypto tax rule was proposed in August, and the public comment period concluded recently after receipt of more than 124,000 comments. At a hearing held recently, industry officials indicated that the tax proposal may be open for revision. A final version is likely to be released in the coming months, and it's expected to address at least some of the industry's concerns.

The Issue with the Definition of 'Broker'

The primary concern lies in how the proposal classifies hosted wallet providers, payment processors, some decentralized finance (DeFi) entities, and others as brokers for tax reporting purposes. The lawmakers argue, The definition of 'Broker' remains too broad and would capture entities that do not possess traditional characteristics of a broker.

Industry's Response to the IRS Proposed Broker Rule

Coming Soon...

Edited by Jonathan Stoker