Coinbase, a major cryptocurrency exchange, has expressed its dissatisfaction with a new tax reform proposal by the Internal Revenue Service (IRS) in the United States. The proposal aims to regulate the crypto sector and address the increasing “tax gap” caused by tax evaders in the industry. However, Coinbase argues that the proposed regulations would impose excessive and unlimited monitoring on American citizens, potentially driving investors and companies away from the country.
The IRS proposal requires exchanges, brokers, and payment processors to implement strict controls on their customers without considering privacy concerns. Coinbase contends that the proposed rules would undermine the very services that the IRS is trying to improve. The Blockchain Association, a cryptocurrency advocacy group, also believes that the provisions could harm the industry in the US.
On the other side, supporters of the IRS proposal, such as Senator Elizabeth Warren, argue that it should be implemented quickly to crack down on tax evasion in the crypto industry. They dismiss industry complaints and urge the IRS to proceed with the reform.
The Treasury Department initially proposed the tax reform in August as part of the Infrastructure Investment and Jobs Act of 2021. The proposal outlines reporting requirements for Crypto Exchanges, payment processors, wallet providers, and decentralized exchanges. These entities would be required to report detailed information about user profiles and transaction details to the IRS.
To simplify the reporting process, the Treasury has introduced a form called 1099-DA, which would assist individuals in calculating their tax obligations without the need for complex capital gains calculations. The reform would cover cryptocurrencies like bitcoin and ether, as well as non-fungible Tokens. The Treasury estimates that the reform could generate approximately $28 billion over a decade in tax revenue.
While the proposal aligns with reporting rules in traditional financial markets, implementing them in the crypto industry could be challenging. The decentralized finance (DeFi) sector, for example, poses difficulties in tracking all information about protocol users without compromising their privacy. Critics argue that the proposed tracking methodology is nonsensical and inappropriate, and could hinder the Development of the crypto industry in the US.
The IRS and the Treasury Department will have time to consider feedback on the proposal until October 30. Public hearings on the reform are scheduled for November 7 and 8. If approved, the rules could be implemented starting in 2025, with reporting requirements in 2026.
In conclusion, Coinbase’s criticism of the IRS’s tax reform proposal highlights a clash between those advocating for stricter Regulation to address tax evasion in the crypto industry and those concerned about the potential negative impact of excessive monitoring on the industry as a whole. The debate raises important questions about privacy, the role of government in regulating cryptocurrencies, and the potential consequences for the future development of the crypto sector in the US..
#news #Coinbase #exchange
The IRS proposal requires exchanges, brokers, and payment processors to implement strict controls on their customers without considering privacy concerns. Coinbase contends that the proposed rules would undermine the very services that the IRS is trying to improve. The Blockchain Association, a cryptocurrency advocacy group, also believes that the provisions could harm the industry in the US.
On the other side, supporters of the IRS proposal, such as Senator Elizabeth Warren, argue that it should be implemented quickly to crack down on tax evasion in the crypto industry. They dismiss industry complaints and urge the IRS to proceed with the reform.
The Treasury Department initially proposed the tax reform in August as part of the Infrastructure Investment and Jobs Act of 2021. The proposal outlines reporting requirements for Crypto Exchanges, payment processors, wallet providers, and decentralized exchanges. These entities would be required to report detailed information about user profiles and transaction details to the IRS.
To simplify the reporting process, the Treasury has introduced a form called 1099-DA, which would assist individuals in calculating their tax obligations without the need for complex capital gains calculations. The reform would cover cryptocurrencies like bitcoin and ether, as well as non-fungible Tokens. The Treasury estimates that the reform could generate approximately $28 billion over a decade in tax revenue.
While the proposal aligns with reporting rules in traditional financial markets, implementing them in the crypto industry could be challenging. The decentralized finance (DeFi) sector, for example, poses difficulties in tracking all information about protocol users without compromising their privacy. Critics argue that the proposed tracking methodology is nonsensical and inappropriate, and could hinder the Development of the crypto industry in the US.
The IRS and the Treasury Department will have time to consider feedback on the proposal until October 30. Public hearings on the reform are scheduled for November 7 and 8. If approved, the rules could be implemented starting in 2025, with reporting requirements in 2026.
In conclusion, Coinbase’s criticism of the IRS’s tax reform proposal highlights a clash between those advocating for stricter Regulation to address tax evasion in the crypto industry and those concerned about the potential negative impact of excessive monitoring on the industry as a whole. The debate raises important questions about privacy, the role of government in regulating cryptocurrencies, and the potential consequences for the future development of the crypto sector in the US..
#news #Coinbase #exchange
