U.S. Representatives Call For Swift Creation Of Crypto Tax Rules, Citing Tax Evasion Concerns

Key Points:

• U.S. Representatives urge the IRS and Treasury to create cryptocurrency tax rules promptly, citing tax evasion concerns and the industry’s contribution to the nation’s tax gap.
• Delays in issuing proposed regulations for cryptocurrency brokers and a broad definition of “broker” that could impact miners and digital assets wallet providers are key areas of concern that need to be addressed to ensure compliance.

The US House of Representatives has urged the IRS and Treasury to develop crypto tax rules as soon as possible.

In a bid to tackle tax evasion in the cryptocurrency industry, U.S. Representatives Brad Sherman and Stephen Lynch have urged the Internal Revenue Service (IRS) and the Department of the Treasury to expedite the formulation of crypto tax regulations. The lawmakers highlighted the industry’s role in contributing to the nation’s tax gap and emphasized the need for immediate action to ensure full compliance.

While the White House completed a review of the controversial tax reporting requirements for digital assets brokers in the Infrastructure Act of 2021 back in February, the administration has yet to issue proposed regulations. The focus lies on the broad definition of a “broker,” which could potentially subject miners and crypto wallet providers to reporting obligations if they fail to comply.

Sherman and Lynch’s call for prompt action stems from their concerns regarding the industry’s history of tax evasion. By implementing comprehensive tax rules, the lawmakers aim to close existing loopholes and ensure that the industry operates within the boundaries of the law.

The absence of clear regulations has posed challenges for taxpayers and industry participants, causing uncertainty and hindering full compliance. With the issuance of well-defined tax rules, individuals and businesses in the digital assets space would have a clear framework to follow, promoting transparency and accountability.

The legislators’ appeal aligns with ongoing efforts to regulate the rapidly evolving cryptocurrency market and ensure proper taxation. By establishing robust tax guidelines, the government aims to enhance revenue collection, minimize tax evasion, and create a level playing field for all taxpayers involved in the cryptocurrency ecosystem.

As the crypto industry continues to expand, the implementation of clear and comprehensive tax rules becomes crucial. The IRS and the Treasury Department now face increasing pressure to address these concerns and swiftly develop regulations that align with the evolving crypto landscape, striking a balance between taxation and fostering innovation within the industry.

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