As such, the group, which includes Democrat Sens. Elizabeth Warren, Richard Blumenthal, Sheldon Whitehouse, Brian Schatz and Gary Peters alongside independent Sens. Bernie Sanders and Angus King, penned a letter to Internal Revenue Service (IRS) Commissioner Daniel Werfel and Secretary of the Treasury Janet Yellen urging immediate implementation of the new rules rather than waiting two years as planned.
“Although we are pleased that the Administration has proposed a strong rule that would help close the massive crypto tax gap, we are alarmed by the self-inflicted two-year delay for the rule’s implementation, which would contravene the requirements of the bipartisan Infrastructure Investment and Jobs Act, disadvantage law-abiding Americans, and cause the federal government to lose out on billions of dollars in tax revenue,” reads the letter from the senators. “We urge your agencies to limit this troubling delay and implement the final rule as swiftly as possible, while maintaining the rule’s substance in the face of industry attacks.”
The new rules require digital asset brokers to present a Form 1099-DA in order to assist taxpayers in determining if they owe cryptocurrency-related taxes as well as helping them avoid complex calculations and tax preparation fees, per the joint announcement from the IRS and Department of Treasury. Republicans, including chairman of the House Financial Services Committee Rep. Patrick McHenry, previously criticized the rules for what they said was a lack of clarity.
From X (Previously Twitter)
"Want less war? #Cryptocurrency solves this. When they can’t print the money out of thin air, they’d have to pass a war tax. No one would vote for it. Peace. P.S. While the money is printed out of thin air, its value is actually stolen from the citizens through inflated prices. P.P.S. The effect on the world of a government stealing its citizens savings through inflation; to buy a war, is perhaps worse than what a counterfeiter does with their ill-gotten loot."
For their part, the senators expressed concerns about shirking a Congressional requirement to implement new reporting requirements by 2024.
“In the 2021 Infrastructure Investment and Jobs Act, Congress unambiguously directed that the new crypto broker reporting requirements apply to all tax returns filed starting in 2024. Yet, the Treasury Department and IRS waited almost two years to issue rules regarding these requirements, making it exceedingly unlikely that the Administration will implement the rules in accordance with Congress’s directive. An additional two-year delay not only contravenes this statutory directive; it runs counter to the interests of American taxpayers and the federal government,” said the senators.
On the other hand, in support of the legislation, the senators indicated they are pleased with the rule’s definition of “broker,” which will include anyone who facilitates a crypto sale while able to identify the seller and nature of the transaction. This, they said, will prevent brokers from turning a blind eye regarding customer data as a way to avoid regulatory scrutiny.
“The crypto ecosystem has long needed basic broker reporting requirements, as the IRS is estimated to be missing out on approximately $50 billion a year in tax revenue from crypto sales. Treasury and IRS’s proposed rule will help law-abiding crypto users file their taxes and help the federal government crackdown on tax cheats, aligning the crypto industry with every other financial industry in the United States by subjecting brokers to standard tax reporting requirements,” the senators add.
The full letter can be accessed here.