On November 13th, 2023, the IRS and Treasury held a public hearing on the proposed crypto reporting regulations. These proposed regulations elaborate on the 2021 changes to the Internal Revenue Code that expanded the definition of broker to include “any person who (for consideration) is responsible for regularly providing any service effectuating transfers of digital assets on behalf of another person,” and are discussed in detail here.
During the hearing, various crypto market participants, representatives of exchanges, and crypto advocacy groups voiced concerns about the proposed regulations. Common concerns raised by participants included:
Notably absent from the hearing were representatives from traditional banking and finance organizations, depriving the IRS and the Treasury of the perspective of sophisticated financial institutions with extensive history in tax compliance. The IRS provided no indication that they plan to postpone the effective dates of the proposed regulations, notwithstanding the submission of substantial commentary to the IRS. At a minimum, the IRS and Treasury have a lot to consider before final regulations are promulgated.
Linda Z. Swartz
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