The United States Internal Revenue Service (IRS) has prolonged the public comment period for the proposed crypto tax reporting regulations introduced in August 2023. This extension grants stakeholders the opportunity to provide feedback until November 13.
On August 29, the IRS unveiled the “Gross Proceeds and Basis Reporting by Brokers and Determination of Amount Realized and Basis for Digital Asset Transactions” rules. These rules mandate brokers to adopt a new reporting form aimed at simplifying tax submissions and curbing tax evasion.
The proposed Form 1099-DA is expected to “assist taxpayers in determining their tax liabilities and reduce the need for intricate calculations or the expense of digital asset tax preparation services,” as per a statement from the U.S. Treasury Department. These regulations are slated to be enforced in 2026, affecting transactions in 2025.
The crypto community has expressed dissatisfaction with the proposed tax rules. CEO of DeFi Education Fund, Miller Whitehouse-Levine, described them as “confusing, self-contradictory, and misguided.” Kristin Smith, CEO of the Blockchain Association, emphasized the distinctions between the crypto ecosystem and traditional finance.
Paul Grewal, the chief legal officer at Coinbase crypto exchange, urged active participation from the crypto community in opposing the Treasury’s proposed regulations. He cautioned that if these regulations become law, they could place “digital assets at a disadvantage and pose a threat to a burgeoning industry that is just taking off.”
Conversely, certain U.S. Senators have urged the Treasury and the IRS to expedite the implementation of crypto tax reporting requirements. Senators Elizabeth Warren, Bernie Sanders, and five others criticized the two-year delay in implementing these regulations.