The United States Internal Revenue Service (IRS) has extended the commentaries period for crypto tax reporting rules proposed in August 2023. The public consultation will last until Nov. 13.
The “Gross Proceeds and Basis Reporting by Brokers and Determination of Amount Realized and Basis for Digital Asset Transactions” rules were made public on Aug. 29. Under the regulations, brokers will need to adopt a novel reporting form to streamline tax submissions and reduce instances of tax evasion.
The proposed Form 1099-DA would “help taxpayers determine if they owe taxes, and […] avoid having to make complicated calculations or pay digital asset tax preparation services to file their tax returns,” according to a U.S. Treasury Department statement. The proposed rules will come into effect in 2026, impacting sales and exchanges conducted in 2025.
Related: IRS proposes unprecedented data-collection on crypto users
The crypto community didn’t react well to the proposed tax rules. DeFi Education Fund CEO Miller Whitehouse-Levine called them “confusing, self-refuting, and misguided,” while Kristin Smith, the CEO of the Blockchain Association, highlighted the difference between the crypto ecosystem and traditional finance.
Paul Grewal, the chief legal officer at Coinbase crypto exchange, urged the crypto community to actively participate in the movement against the Treasury’s proposed regulations. If the regulations become law, he added, it would put “digital assets at a disadvantage and threaten to harm a nascent industry when it’s just getting started.“
Meanwhile, members of the U.S. Senate have called on the Treasury and the IRS to advance a rule “as swiftly as possible.” Elizabeth Warren, Bernie Sanders and five other enators criticized a two-year delay in implementing crypto tax reporting requirements.
Magazine: 6 Questions for Adelle Nazarian on crypto, journalism and the future of Bitcoin