As a researcher with experience in the blockchain and cryptocurrency industry, I am deeply concerned about the new tax rules proposed by the Internal Revenue Service (IRS). The proposed “broker-dealer” rules, as described in a recent letter from the Blockchain Association, seem excessively complex and costly to implement.
I’m currently working on a project involving the Blockchain Association, and they have expressed their concerns over the proposed new tax rules by the Internal Revenue Service (IRS). They believe that these rules are excessively intricate and expensive for them to put into practice.
A prominent Washington D.C. organization supporting the cryptocurrency sector argues in a recent correspondence that the Internal Revenue Service’s (IRS) latest “broker-dealer” regulations infringe upon the Paperwork Reduction Act, which forbids federal agencies from imposing unduly burdensome paperwork requirements.
As a crypto investor, I find the prospect painted by the Association alarming. Based on their estimates, the implementation of these rules could lead to the creation of 8 billion new tax forms for individuals like myself. The process of handling these forms would allegedly require an enormous investment of time – a staggering 4 billion hours. Furthermore, the annual cost of complying with these rules is projected to reach an astounding $254 billion.
The data presented is considerably greater than the IRS’s original forecasts, which anticipated approximately 9 minutes per client and a grand total of $136 million in costs. The Blockchain Association contends that imposing such a substantial financial obligation on an industry potentially underpaying tax revenues by merely $10 billion is unjustifiable.
It is unrealistic for the industry to be mandated to spend over $250 billion annually to address a tax gap of only around $10 billion each year.
The Association raises concerns over the impractical use of the suggested regulations, as they necessitate reporting on insignificant transactions involving assets such as stablecoins. These transactions seldom lead to taxable profits or losses.
The Blockchain Association raised concerns last year by submitting a comprehensive 39-page letter during the regulatory proposal stage. In this letter, they highlighted the challenges several entities within the blockchain sector would face in complying with the proposed regulations. Currently, the crypto community is keeping an eye on the IRS’s reaction to these recent objections.
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2024-06-22 02:45