US Lawmakers Urge Treasury to Revise Proposed Crypto Tax Rules
Latest News News

US Lawmakers Urge Treasury to Revise Proposed Crypto Tax Rules

A group of bipartisan US lawmakers have urged the Treasury to revise its proposed digital-assets taxation regime. 

The group is backing crypto representatives and lawyers who have called the proposed taxation scheme “dangerous and improper overreach.”

Chairman of the House Financial Services Committee, Patrick McHenry (R-NC) and Congressman Ritchie Torres (D-N.Y) led a group of nine lawmakers in the effort calling the tax reporting requirement “unworkable.”

Read Also: The Monetary Authority of Singapore Launches Project Guardian, A Tokenization Initiative

“If finalized, the proposed regulation’s overly broad definition of a digital asset “Broker,” insufficient definition of a “Digital Asset,” and unreasonably short comment period threaten to prevent a large swath of the digital asset ecosystem from continuing to exist in the United States,” the Wednesday announcement said as it made public the Nov. 10 letter addressed to the U.S. Treasury Department’s Assistant Secretary Lily Batchelder.

The crypto tax rule was proposed in August, and a public comment period ended Monday after more than 124,000 comments. 

At a recent audio-only hearing, questions from officials to the industry revealed that the tax proposal may be “open for revision.” 

A final version is likely months away and could see a response to at least some of the industry’s condemnation.

The major sticking point is how the proposal captures hosted wallet providers, payment processors, some decentralized finance (DeFi) entities and others as “brokers” for tax reporting purposes. 

“The definition of ‘Broker’ remains too broad and would capture entities that do not possess traditional characteristics of a broker,” the letter said.

Crypto products and NFTs are unregulated and can be highly risky. There may be no regulatory recourse for any loss from such transactions. Crypto is not a legal tender and is subject to market risks. Readers are advised to seek expert advice and read offer document(s) along with related important literature on the subject carefully before making any kind of investment whatsoever. Crypto market predictions are speculative and any investment made shall be at the sole cost and risk of the readers.