US Treasury Department Proposes New Reporting Requirements for Digital Asset Brokers – An Attempt to “Kill” Crypto Adoption?
The US Department of the Treasury and Internal Revenue Service (IRS) on Friday released new proposed regulations that would require the brokers of digital assets to report certain sales and exchanges in an effort to crack down on tax cheats, as well as to assist law-abiding taxpayers know how much they owe.
As per an announcement made on the Treasury Department’s website, “the proposed regulations would clarify and adjust the rules regarding the tax reporting of information by brokers, so that brokers for digital assets are subject to the same information reporting rules as brokers for securities and other financial instruments”.
According to the Treasury Department and IRS, under current tax laws, digital tax calculations are “difficult and costly to calculate”.
Under the administration’s new proposal, brokers will be required to provide a new Form 1099-DA, which it says will help taxpayers determine if they owe taxes, and would help taxpayers avoid having to make complicated calculations or pay digital asset tax preparation services in order to file their tax returns.
“These regulations align tax reporting on digital assets with tax reporting on other assets, and, as a result, avoid preferential treatment between different types of assets”.
If approved, the rules would require top cryptocurrency exchanges to report customer information to the IRS.
The proposed regulations are now open to a period of public comment and feedback.
Written comments will be accepted until October 30th, while a public hearing has been scheduled for the 7th and 8th of November.
In response to the proposed regulations, chairman of the House Financial Services Committee Patrick Henry (a Republican) claimed that the Biden administration is trying to
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