Regulation
Consensys Calls on IRS to Postpone Crypto Tax Regulation
Blockchain development company, Consensys, has written to the US Internal Revenue Service requesting a delay in tax regulation that would have required brokers and exchanges to report specific types of cryptocurrency.
Bill Hughes, an attorney for Consensys, She said in post traditionally they have no reporting obligations.”
The IRS has released a first version of the 1099-DA form, in April. The IRS’s efforts to treat cryptocurrency brokers the same as traditional financial brokers for tax reporting purposes are the source of 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 non-hosted wallet providers, kiosk operators and others.
Consensys claims: “For example, the Draft Form has not been published with instructions for brokers, which presents an insurmountable challenge when they are asked to create a plan to implement the Draft Form. Simply put, it is not clear how to report it in different boxes of the Draft Form”.
The company also added that the module could potentially harm US companies specializing in blockchain user interfaces and self-custodial wallets. Additionally, concerns have been raised about data privacy issues and the limited time intermediaries have to comply with the new requirements before upcoming tax filing deadlines.
Bill noted, “We believe the draft form further illustrates the need for a delay in the effective date of any reporting requirements that would affect a software developer like Consensys, as well as the need for a multiple broker rule.”
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