Regulation
Consensys asks IRS to postpone crypto tax regulations
Blockchain development company Consensys has written to the US Internal Revenue Service to request a delay in tax regulations that would have required brokers and exchanges to report specific types of cryptocurrency.
Bill Hughes, lawyer at Consensys, said in post potential, which currently includes entities. who traditionally have no reporting obligation.
The IRS has issued a first version of form 1099-DA, in April. The IRS’s efforts to treat cryptocurrency brokers the same as traditional financial brokers for tax reporting purposes are behind the proposed regulations. This includes issuing Form 1099-DA for certain cryptocurrency transactions.
Brokers are listed in the draft form as digital asset payment processors, hosted and unhosted wallet providers, kiosk operators and others.
Consensys states: “For example, the draft form was not published with instructions for brokers, which presents an insurmountable challenge when asked to create a plan to implement the draft form. Simply put, it is not clear how to report in several boxes of the draft form.
The company also added that the form could potentially harm US companies specializing in blockchain user interfaces and self-custody wallets. Additionally, concerns have been raised about data privacy issues and the limited time brokers have to comply with the new requirements before upcoming tax filing deadlines.
Bill noted, “We believe the proposed form further illustrates the need to delay the effective date of any reporting requirements that would affect a software developer like Consensys as well as the need for a multi-dealer rule.”
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