As part of CoinDesk's Tax Week 2023, Coin Center Director of Research Peter Van Valkenburgh explains why the crypto industry has responded with over 120,000 comments regarding a controversial new tax proposal from the IRS.
Several members of Congress, both in the House led perhaps by um Representative mchenry who was acting speaker for a time, but also members in the Senate um Cinema and Portman, the senators that actually originally drafted the infrastructure bill language have all written subsequent legislation to say, don't miss apply what we did. Don't be confused. We want you the IRS to collect tax information from true intermediaries like Coinbase and Kraken. That's the low hanging fruit for how we get better tax compliance in crypto. Don't go on a wild goose chase trying to force people who are just publishing software, which means they're exercising their freedom of speech to somehow change their business from being a publisher of information to a financial institution that actually has customer relationships with a bunch of customers. That kind of extremely drastic step isn't going to improve tax compliance because it's an irrational policy to tell people who just write software to, to change their line of business. And it's also of course an unconstitutional policy. So we've had champions in the Senate and in the House who have said, look, Treasury needs to be cautious about how it proceeds here there's a lot of good that can be done from common sense, tax reporting standards for intermediaries. But Treasury also can go very wrong here, trample on our first amendment and fourth amendment rights and basically waste the time of law enforcement and tax professionals because these rules won't be able to be enforced. They're just, they're nonsensical in the context that they've been actually drafted.