US Senators Urge Swift Implementation of Crypto Tax Reporting Rules Amidst Concerns of Tax Evasion
Summary:
Seven US Senators, including Elizabeth Warren and Bernie Sanders, have urged the US Treasury Department and the IRS to quickly implement tax reporting rules for cryptocurrency brokers, originally scheduled for 2026. Citing a potential loss of $50 billion in annual tax revenue due to the delay, they argue the rules could prevent tax evasion. Commenting on crypto being used to fund Hamas, Warren called for greater regulatory oversight. The proposed rules, currently under review, require brokers to assist taxpayers in understanding tax obligations from cryptocurrency activities.
A group of seven American senators has urged the US Treasury Department and the Internal Revenue Service (IRS) to expedite the implementation of proposed tax reporting measures for cryptocurrency brokers. In a letter dated October 10, addressed to Treasury Secretary Janet Yellen and IRS Commissioner Daniel Werfel, senators including Elizabeth Warren and Bernie Sanders voiced their disapproval of a two-year postponement in enforcing these tax reporting rules, slated to come into effect in 2026 for transactions made in 2025. The senators assert that this delay could cost the IRS an estimated $50 billion in yearly tax earnings and continue enabling those with unethical intentions to evade tax payments.
"We appreciate your departments' initiative to ensure tax compliance in crypto activities, but we are concerned that the final implementation of these regulations won't take place until 2026," stated the correspondence. "Such delays only clever crypto advocates with more chances to challenge these fundamental requirements for the largely unregulated crypto industry, especially at a time when attempts are underway to overturn the newly implemented reporting laws. The time for action is now."
On October 11, Senator Warren took to social media platform X (known previously as Twitter) to label cryptocurrency as the "financial undercurrent" supporting Hamas during its conflict with Israel. In the wake of requests from Israeli authorities, Binance, a cryptocurrency exchange, confirmed that it had suspended accounts associated with Hamas on October 10.
"Digital wallets linked to Hamas receiving millions in cryptocurrencies is deeply alarming and lawmakers and regulators need to wake up to this reality," Warren posted on October 11, 2023.
Noteworthy Context: The IRS made public a draft of the proposed reporting rules for cryptocurrency asset brokers in August, which remained open for public feedback till the end of October. These guidelines will compel brokers to help taxpayers understand tax obligations stemming from cryptocurrency activities and report digital asset transactions. Patrick McHenry, the acting House Speaker following a decision by Republican legislators to declare the position vacant, critiqued this directive, branding it an "assault on the digital assets environment."
Extra Info: An informational guide on the ideal and worst countries for crypto taxation along with useful tips on crypto-related taxes is available in the magazine.
Published At
10/11/2023 9:45:00 PM
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