- The IRS unveiled new guidelines aimed at tightening crypto tax reporting and closing loopholes.
- However, crypto industry leaders strongly oppose the changes, arguing they will stifle innovation and privacy in the US compared to other countries.
- Critics believe the rules need to be tailored specifically to crypto, not just copied from traditional asset reporting.
The US Internal Revenue Service (IRS) recently unveiled a set of new tax reporting guidelines. Endorsed by President Joe Biden, these rules aim to tighten the noose on tax evasion in the digital asset space. However, the proposal has been met with a mix of skepticism and outright opposition from key industry figures.
On August 25, the IRS proposed that crypto brokers adopt new forms designed to streamline tax filing and curb tax evasion. The U.S. Department of the Treasury further clarified that the objective is to align digital asset reporting with that of traditional assets.
US Industry Leaders Voice Concerns
Ryan Selkis, CEO of Messari, was quick to express his disapproval. Selkis warned that if Biden secures a second term, the U.S. could become an inhospitable environment for the crypto industry.
There's no future for crypto in the US if Biden is reelected. I'm sorry.
Move abroad, draft Newsom and hope for the best, or vote GOP where at least we know the top three candidates are less terrible on this issue.
Crypto has always been political.
Have a nice weekend.
— Ryan Selkis(@twobitidiot) August 25, 2023
Chris Perkins, president of CoinFund, echoed Selkis’ sentiments. Perkins argued that the U.S. is already lagging behind other nations in crypto innovation, and these new rules would only widen the gap. He advocated for “simple and detailed rules” that would foster, rather than stifle, innovation.
The new rules have also ignited debates over privacy. Critics argue that the U.S.’s focus on income tax means that private transactions on public ledgers would be subject to intrusive tax and sanction surveillance.
Kristin Smith, CEO of the Blockchain Association, expressed reservations about lumping digital asset reporting with traditional assets. She emphasized that the crypto ecosystem operates differently and that any rules should be “tailored accordingly.”
