Blockchain
The Blockchain Association challenges the IRS broker rule in a recent letter
The Blockchain Association is fighting new tax rules proposed by the Internal Revenue Service (IRS), arguing that they are too complex and expensive to implement.
In a recent letter, the Washington, D.C.-based group that advocates for the cryptocurrency industry says the IRS’s new rules on “broker-dealers” violate the Paperwork Reduction Act, which prevents government agencies from creating unnecessarily complicated documents.
The Association paints a worrying picture of what could happen if these rules go into effect. It estimates they would create 8 billion new tax forms, take 4 billion hours to process, and cost $254 billion a year to comply with the rules.
Letter from the Blockchain Association to the IRS | Source: Blockchain Association
These figures are significantly higher than the IRS’ initial projections, which estimated approximately 9 minutes per customer and a total cost of $136 million. The Blockchain Association argues that it is unreasonable to impose such a heavy burden on an industry that, at most, could pay less than $10 billion in taxes.
In the letter, the Association states: “Asking the industry to spend more than $250 billion per year to help reduce a tax gap that is, at the highest level imaginable, $10 billion per year, is all unreasonable.”
The Association also criticizes the lack of practical utility of the proposed regulations, pointing out that they would require reporting on mundane transactions and assets such as stablecoins, which rarely result in taxable profits or losses.
However, this is not the time for the association to express concern. Last year, the Blockchain Association presented a detailed document 39 page letter arguing that many entities in the blockchain ecosystem would have difficulty complying with the proposed regulations. The crypto space awaits the IRS’s response to the latest objections
Read also: Michael suggests a possible BTC strategy for Dell Technologies