In August, the IRS unveiled its proposed crypto tax reporting requirements, which are slated to become enforceable in 2026. However, a group of seven senators, including prominent figures like Elizabeth Warren and Bernie Sanders, believes that this timeline falls short of the urgency required.
These senators have jointly petitioned the Treasury Department and the Internal Revenue Service (IRS) to expedite the implementation of a rule that mandates specific tax reporting obligations for crypto brokers as swiftly as possible. In a letter dated October 10, addressed to Treasury Secretary Janet Yellen and IRS Commissioner Daniel Werfel, they expressed their concerns about the two-year postponement in instituting these crypto tax reporting requirements. The regulations, as currently outlined, are set to take effect in 2026 for transactions occurring in 2025. The senators argue that this delay could potentially cost the IRS approximately $50 billion in annual tax revenue and perpetuate policies that enable wrongdoers to evade their tax obligations.
The letter emphasizes, “While we commend the substance of the proposed regulations and your agencies’ commitment to ensuring that taxpayers continue to report their crypto activity, we are deeply troubled by the fact that the final rule will not be enacted until 2026. Any delay would offer crypto lobbyists even more opportunities to undermine the Administration’s efforts to establish fundamental reporting requirements in the largely unregulated crypto sector. This is particularly concerning at a time when the industry is actively advocating for the repeal of recently introduced reporting requirements. The need for immediate action is clear.”
On October 11, Elizabeth Warren used the platform X (formerly known as Twitter) to describe crypto as “the not-so-secret financial weapon” financing Hamas during the conflict with Israel. In response to requests from Israeli law enforcement, crypto exchange Binance announced the freezing of accounts linked to Hamas on October 10.
The IRS’s proposed crypto reporting requirements, which were unveiled in August, were open for public comments until October 30. These requirements necessitate that brokers assist taxpayers in determining their tax liabilities related to crypto and report information about digital asset transactions. Representative Patrick McHenry, who is temporarily fulfilling the role of House Speaker following a vote by Republican lawmakers declaring the office vacant, has criticized this measure, characterizing it as an “assault on the digital asset ecosystem.”
