TechDigits

Tech news
Monday, Mar 18, 2024

Crypto Surprise Rattles Industry in Rare Bipartisan U.S. Tax Plan

Crypto Surprise Rattles Industry in Rare Bipartisan U.S. Tax Plan

A Senate proposal to ramp up IRS surveillance over cryptocurrency transactions has the industry and investors questioning the plan’s viability and its promise of generating $28 billion in tax revenue.

Cryptocurrency exchanges, investors and their advisers were caught off guard Wednesday when a bipartisan Senate infrastructure agreement was released that included a large-scale increase in the requirements for crypto brokers and investors to report their transactions to the Internal Revenue Service. The reason for the last-minute inclusion: the proposal would raise a chunk of money to help fund the $550 billion of investment into transportation and utility upgrades.

The proposal — which updates rules requiring brokers to report cryptocurrency transactions and for businesses investing in crypto to disclose trades of more than $10,000 — was the result of a compromise between the White House and Senator Rob Portman, a lead Republican negotiator. The provision includes portions of a Portman measure, according to a person familiar with the matter. The White House has also proposed similar ideas in recent months.

“Instead of rushing through an untested provision with vast unintended consequences, we encourage Congress to work with industry to find language that works for all stakeholders,” said Kristin Smith, who heads the Blockchain Association, a Washington-based trade group.

The plan addresses a key challenge for the federal government: keeping up with the explosion of cryptocurrencies, both in quantity and in value, which allow holders to circumvent the traditional banking system and remain largely anonymous. The market’s value surpassed $2 trillion this year.

IRS Commissioner Chuck Rettig has said tax evasion from virtual currency is a key contributor to the growing tax gap, the difference between what’s owed and what the agency actually collects. Cryptocurrency use has also been tied to illegal activity, including drug trafficking and money laundering.

Cryptocurrencies have evolved much more quickly than the government has been able to pass laws to regulate it, making a rare shared concern for both Republicans and Democrats, who largely disagree on tax issues.

Mutually Agreeable


That made additional tax enforcement in the area mutually agreeable, even after lawmakers decided to cut an earlier proposal in the infrastructure plan for a broader expansion of IRS audits. Republicans deemed that idea too expansive.

At the same time, cryptocurrency investors have been frustrated for years with a lack of rules from the federal government about how to report their holdings for tax purposes. Instead of more clarity in how to follow the rules they’ve faced an uptick in audits and enforcement activity.

“Everybody’s been talking about the appropriate way to provide more reporting in particular and that leads to better compliance,” Portman told reporters Wednesday after the deal was announced.

The cryptocurrency industry, however, raised questions about whether the $28 billion revenue estimate — from Congress’s official tax scorekeeper, the Joint Committee on Taxation — was accurate.

Newsletter

Related Articles

TechDigits
0:00
0:00
Close
FTX's Bankman-Fried headed for jail after judge revokes bail
America's First New Nuclear Reactor in Nearly Seven Years Begins Operations
Southeast Asia moves closer to economic unity with new regional payments system
Today Hunter Biden’s best friend and business associate, Devon Archer, testified that Joe Biden met in Georgetown with Russian Moscow Mayor's Wife Yelena Baturina who later paid Hunter Biden $3.5 million in so called “consulting fees”
Google testing journalism AI. We are doing it already 2 years, and without Google biased propoganda and manipulated censorship
Musk announces Twitter name and logo change to X.com
The future of sports
TikTok Takes On Spotify And Apple, Launches Own Music Service
Hacktivist Collective Anonymous Launches 'Project Disclosure' to Unearth Information on UFOs and ETIs
Typo sends millions of US military emails to Russian ally Mali
Server Arrested For Theft After Refusing To Pay A Table's $100 Restaurant Bill When They Dined & Dashed
Democracy not: EU's Digital Commissioner Considers Shutting Down Social Media Platforms Amid Social Unrest
Sarah Silverman and Renowned Authors Lodge Copyright Infringement Case Against OpenAI and Meta
Why Do Tech Executives Support Kennedy Jr.?
The New York Times Announces Closure of its Sports Section in Favor of The Athletic
Florida Attorney General requests Meta CEO's testimony on company's platforms' alleged facilitation of illicit activities
The Poor Man With Money, Mark Zuckerberg, Unveils Twitter Replica with Heavy-Handed Censorship: A New Low in Innovation?
The Double-Edged Sword of AI: AI is linked to layoffs in industry that created it
US Sanctions on China's Chip Industry Backfire, Prompting Self-Inflicted Blowback
Meta Copy Twitter with New App, Threads
BlackRock Bitcoin ETF Application Refiled, Naming Coinbase as ‘Surveillance-Sharing’ Partner
UK Crypto and Stablecoin Regulations Become Law as Royal Assent is Granted
A Delaware city wants to let businesses vote in its elections
Alef Aeronautics Achieves Historic Milestone with Flight Certification for World's First Flying Car
Google Blocked Access to Canadian News in Response to New Legislation
French Politicians Advocate for Pan-European Regulation on Social Media Influencers
Melinda French Gates Advocates for Increased Female Representation in AI to Prevent Bias
Snapchat+ gains 4 million paying subscribers in its first year
Apple Makes History as the First Public Company Valued at $3 Trillion
Elon Musk Implements Twitter Limits to Tackle Data Scraping, but Faces Criticism for Technical Misunderstanding
EU and UK's Slow Electric Vehicle Adoption Raises Questions About the Transition to Green Mobility
Top Companies Express Concerns Over Europe's Proposed AI Law, Citing Competitiveness and Investment Risks
Meta Unveils Insights on AI Usage in Facebook and Instagram, Amid Growing Calls for Transparency
Crypto Scams Against Seniors Soar by 78% in 2022, Experts Urge Vigilance
The End of an Era: National Geographic Dismisses Last of Its Staff Writers
Shield Your Wallet: The Perils of Wireless Credit Card Theft
Harvard Scientist Who Studies Honesty Accused Of Data Fraud, Put On Leave
Putting an End to the Subscription Snare: The Battle Against Unwitting Commitments
The Legal Perils of AI: Lawyer Faces Sanctions for Relying on Fictional Cases Generated by Chatbot
ChatGPT’s "Grandma Exploit": Ingenious Hack Exposes Loophole in AI, Generates Free Software Codes
The Disney Downturn: A Near Billion-Dollar Box Office Blow for the House of Mouse
A Digital Showdown: Canada Challenges Tech Giants with The Online News Act, Meta Strikes Back
Distress in the Depths: Submersible and Passengers Missing in Titanic Wreckage Expedition
Mark Zuckerberg stealing another idea: Twitter
European Union's AI Regulations Risk Self-Sabotage, Cautions smart and brave Venture Capitalist Joe Lonsdale
Nvidia GPUs are so hard to get that rich venture capitalists are buying them for the startups they invest in
Chinese car exports surge
Reddit Blackout: Thousands of Communities Protest "Ludicrous" Pricing Changes
Nvidia Joins Tech Giants as First Chipmaker to Reach $1 Trillion Valuation
AI ‘extinction’ should be same priority as nuclear war – experts
×