IRS Extends Comments Period for New Crypto Tax Rule to Mid-November – The IRS in the United States has prolonged the duration for public comments on the proposed crypto tax reporting rules from August 2023, with the consultation now set to conclude on November 13th. The “Gross Proceeds and Basis Reporting by Brokers and Determination of Amount Realized and Basis for Digital Asset Transactions” rules were made public on Aug. 29.
According to the new rules, brokers must implement an innovative reporting format to simplify the process of submitting taxes and minimize tax evasion cases. The proposed Form 1099-DA would “help taxpayers determine if they owe taxes, and avoid having to make complicated calculations or pay digital asset tax preparation services to file their tax returns,” according to a U.S. Treasury Department statement.
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The proposed rules will come into effect in 2026, impacting sales and exchanges conducted in 2025. The crypto community didn’t react well to the proposed tax rules. DeFi Education Fund CEO Miller Whitehouse-Levine called them “confusing, self-refuting, and misguided,” while Kristin Smith, the CEO of the Blockchain Association, highlighted the difference between the crypto ecosystem and traditional finance.
The Chief Legal Officer of Coinbase crypto exchange, Paul Grewal, called on the cryptocurrency community to engage proactively in the effort against the Treasury’s proposed regulations. If the regulations become law, he added, it would put “digital assets at a disadvantage and threaten to harm a nascent industry when it’s just getting started.”
At the same time, U.S. Senators, including Elizabeth Warren, Bernie Sanders, and five others, have urged the Treasury and the IRS to expedite the creation of a rule without delay. They voiced their concerns about a two-year postponement in enforcing cryptocurrency tax reporting obligations. While some senators are pushing for swift action, others are concerned about the delay in implementing crypto tax reporting requirements.