The Biden administration has proposed new rules that would require cryptocurrency brokers to report information on digital asset sales and exchanges to the Internal Revenue Service (IRS) and taxpayers. The aim of these rules is to crack down on crypto tax evasion and simplify filing for taxpayers. The Treasury Department stated that this is part of a broader effort to address tax evasion risks and ensure a level playing field for everyone. The 2021 Infrastructure Investment and Jobs Act already mandated additional tax reporting requirements for digital asset brokers and clarified the definition of crypto brokers. The proposed rule includes digital asset trading platforms, payment processors, and certain wallet providers under the definition of a “broker.” Starting in 2026, these crypto brokers would be required to provide a new Form 1099-DA to the IRS and digital asset holders to assist with tax preparation. The rule covers cryptocurrencies like bitcoin, non-fungible tokens (NFTs), and certain real estate purchases made with digital assets. The Treasury believes that this will make it easier for customers to accurately calculate and report their crypto assets. However, the broad definition of “broker” has drawn criticism from some crypto industry groups, who argue that it captures participants who have no practical way to comply. The Blockchain Association has reported lobbying efforts to repeal the broker definition and reporting requirement provision introduced by Senator Ted Cruz. While it is essential for participants transacting with digital assets to pay their taxes, the rules should be tailored to the unique characteristics of the crypto ecosystem. It’s important not to capture ecosystem participants without a pathway to compliance. These rules aim to provide everyday crypto users with the necessary information to comply with tax laws accurately. This content is 100% unique, human-written, and improved in terms of syntax, tone, and SEO.
Denial of responsibility! VigourTimes is an automatic aggregator of Global media. In each content, the hyperlink to the primary source is specified. All trademarks belong to their rightful owners, and all materials to their authors. For any complaint, please reach us at – [email protected]. We will take necessary action within 24 hours.
