<\/p>\n
The US Treasury Department recently released an extensive 300-page proposal detailing cryptocurrency tax reporting guidelines. Now, the industry is seeking to interpret its implications.<\/p>\n
The Treasury alongside the Internal Revenue Service introduced the proposed regulations, which include the long-awaited definition of \u201cbroker,\u201d on Friday, as stipulated by the 2021 Infrastructure Investment and Jobs Act.\u00a0<\/p>\n
The new rules could mark the beginning of a new era of clarity for investors and crypto businesses, who accountants say have struggled to decipher tax obligations for years.\u00a0<\/p>\n
\u201cAlthough tax information reporting requirements have played a key role in traditional finance \u2014 as a necessary element of tax compliance \u2014 such requirements have been missing from the digital asset ecosystem,\u201d Miles Fuller, head of government solutions at TaxBit, said.\u00a0<\/p>\n
\u201cThe lack of tax reporting requirements for digital assets has left individual taxpayers struggling to accurately report their taxes as they sort through convoluted data files that are not easy to interpret or understand.\u201d\u00a0<\/p>\n
Other industry members expressed concern over the proposal\u2019s know your customer (KYC) requirements for exchanges and wallet providers. DeFi exchanges and NFTs are also included in these new rules.\u00a0<\/p>\n
Miller Whitehouse-Levine, CEO of the DeFi Education fund called Friday\u2019s release \u201ca confusing and self-refuting proposal.\u201d\u00a0<\/p>\n
\u201cAs feared, it strains to find non-existent financial intermediaries in crypto \u2014 including DAOs and certain wallet providers \u2014 or to create them,\u201d Whitehouse-Levine added.\u00a0<\/p>\n
Under the proposal, \u201cbrokers\u201d would include \u201ctrading platforms, digital asset payment processors, certain digital asset hosted wallet providers, and persons who regularly offer to redeem digital assets that were created or issued by that person.\u201d Regulators opted to exempt individual miners and validators from broker reporting requirements, alleviating a concern prevalent throughout much of the industry.<\/p>\n
In 2021, the Blockchain Association, a crypto lobbying group, sent a letter<\/a> to US senators about the Infrastructure Investment and Jobs Act. In the letter, the group expressed concern that an overly broad definition of \u2018broker\u2019 could be used to encompass \u201calmost any participant\u201d in the crypto sector. Such a definition could place unfair and impractical reporting burdens on these parties.<\/p>\n \u201cIf done correctly, these rules could help provide everyday crypto users with the necessary information to accurately comply with tax laws,\u201d Kristin Smith, CEO of the Blockchain Association, said Friday after the new proposal was released. \u201cHowever, it\u2019s 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\u2019t have a pathway to compliance.\u201d\u00a0<\/p>\n The rules, if passed, would go into effect in 2026, for the 2025 tax year.\u00a0<\/p>\n The public comment period for the proposed rules is open until Oct. 30, 2023. A public hearing has been scheduled for Nov. 7, 2023, and if needed will extend to Nov. 8 to accommodate additional requests to speak. The deadline to request to speak at the hearing is Oct. 30.<\/p>\n Get the day\u2019s top crypto news and insights delivered to your email every evening.\u00a0Subscribe to Blockworks\u2019 free newsletter<\/a>\u00a0now.<\/strong><\/p>\n Want alpha sent directly to your inbox? Get degen trade ideas, governance updates, token performance, can\u2019t-miss tweets and more from\u00a0Blockworks Research\u2019s Daily Debrief<\/a>.<\/strong><\/p>\n Can\u2019t wait? Get our news the fastest way possible.\u00a0Join us on Telegram<\/a>\u00a0and follow us on\u00a0Google News<\/a>.<\/strong><\/p>\n<\/div>\n","protected":false},"excerpt":{"rendered":" The US Treasury Department recently released an extensive 300-page proposal detailing cryptocurrency tax reporting guidelines. Now, the industry is seeking to interpret its implications. The Treasury alongside the Internal Revenue Service introduced the proposed regulations, which include the long-awaited definition of \u201cbroker,\u201d on Friday, as stipulated by the 2021 Infrastructure Investment and Jobs Act.\u00a0 The […]<\/p>\n","protected":false},"author":2,"featured_media":142713,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[5],"tags":[230,225,221,227,226,228,229,60,223,224,222],"class_list":["post-142712","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-cryptocurrency","tag-brave","tag-coinbase","tag-crypto","tag-decentralised","tag-decentralized","tag-decentralized-exchange","tag-erc-20","tag-featured","tag-meme-coin","tag-robinhood","tag-solana"],"_links":{"self":[{"href":"https:\/\/dripp.zone\/news\/wp-json\/wp\/v2\/posts\/142712","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/dripp.zone\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/dripp.zone\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/dripp.zone\/news\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/dripp.zone\/news\/wp-json\/wp\/v2\/comments?post=142712"}],"version-history":[{"count":2,"href":"https:\/\/dripp.zone\/news\/wp-json\/wp\/v2\/posts\/142712\/revisions"}],"predecessor-version":[{"id":146550,"href":"https:\/\/dripp.zone\/news\/wp-json\/wp\/v2\/posts\/142712\/revisions\/146550"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/dripp.zone\/news\/wp-json\/wp\/v2\/media\/142713"}],"wp:attachment":[{"href":"https:\/\/dripp.zone\/news\/wp-json\/wp\/v2\/media?parent=142712"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/dripp.zone\/news\/wp-json\/wp\/v2\/categories?post=142712"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/dripp.zone\/news\/wp-json\/wp\/v2\/tags?post=142712"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}
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