Two US congressmen are calling on the Internal Revenue Service (IRS) to accelerate efforts to ensure cryptocurrency users are tax-compliant.
In a new letter, Rep. Brad Sherman of California and Rep. Massachusetts’ Stephen Lynch blamed the crypto industry for being a major source of tax evasion.
The letter, sent to Secretary of the Treasury Janet Yellen and Commissioner of the Internal Revenue Service Daniel Werfel, calls for the swift promulgation of tax-related reporting requirements for digital assets.
According to the two Democratic congressmen, the passage of the Infrastructure Investment and Jobs Act of 2022 required cryptocurrency companies to begin tracking and reporting customer transactions to the IRS for tax filing purposes. The Ministry of Finance announced in December 2022 that the reporting requirement will not take effect for the crypto firms until the department issues rules for reporting.
However, those regulations have yet to be issued, and Congressmen are urging the IRS to deliver them as soon as possible.
says the letter,
“The cryptocurrency industry had all of 2022 to prepare for the infrastructure law tax filing requirements and now it is apparently getting 2023 off as well. We hope that Treasury/IRS will release the proposed regulations soon so that we can close the tax gap and make the cryptocurrency industry fully taxable.”
According to the congressmen, transaction reporting from crypto firms will greatly contribute to the industry’s tax compliance.
The letter cites a September 2020 Treasury Inspector General report stating that the “IRS cannot easily identify taxpayers with virtual currency transactions due to the lack of reporting of third-party information specifically identifying virtual currency transactions.”
Tell the two congressmen,
“We are writing to express our deep concern about the state of tax compliance by the cryptocurrency industry. That industry has been a major source of tax evasion for years and a significant part of the country’s tax gap.”
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