Warren Challenges Delay In Crypto Tax Rules
Senator Warren questions the delayed crypto tax rules, highlighting potential revenue loss but praising the definition of digital assets.
Senator Elizabeth Warren has raised concerns about the US government's decision to defer the implementation of cryptocurrency tax regulations until 2026. In a letter addressed to US Treasury Secretary Janet Yellen and IRS Commissioner Daniel Werfel, Warren questioned the postponement, suggesting that it could lead to significant loss of revenues for the government.
Urgent Need For Speedy Implementation
In her letter, Warren expressed alarm over the two-year postponement, emphasizing its contradiction with the bipartisan Infrastructure Investment and Jobs Act. She highlighted the potential financial impact of the delay, warning that billions of dollars in tax revenue could go uncollected.
Warren referred to data showing widespread public confusion about the taxation of digital assets, attributing the lack of knowledge as a reason the IRS is currently failing to collect approximately $50 billion annually from the burgeoning crypto sector.
Government Praised For Definition Of Digital Assets
Despite her concerns, Warren lauded the US government for its articulate and adaptive definition of what constitutes a digital asset, a critical component in the proposed regulations. She noted that this definition is well-aligned with that specified in the Infrastructure Investment and Jobs Act, thereby providing sufficient scope for accommodating the fast-paced advancements in the cryptocurrency domain.
Upcoming Regulatory Milestones
Following the unveiling of draft regulations by the Treasury Department and the IRS, which focus on how digital assets are handled by brokers, Warren requested an update from Yellen and Werfel by October 24. The proposals, if accepted, will tighten the reporting requirements for cryptocurrency brokers, aiming to level the tax reporting field between crypto profits and traditional investment gains. The heightened scrutiny seeks to bolster the government’s ability to prevent tax evasion related to digital asset transactions.
Subscribe to our newsletter and follow us on Twitter.