Consensys Urges U.S IRS to Postpone Crypto Tax Reporting Rules
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- An early version of Form 1099-DA was issued in April by the IRS.
- Consensys also raised the issue that brokers have little time to comply before the filing deadline.
In a letter sent to the United States Internal Revenue Service (IRS), blockchain development company Consensys asked for a postponement of the planned tax legislation. That would have exchanges and brokers report specific cryptocurrency sales.
The letter stated:
“We must echo our overarching concern … that certain aspects of the regulations do not sufficiently consider the burden on the would-be broker, which currently includes entities that do not traditionally have any reporting obligations.”
Not Enough Specific Instructions
An early version of Form 1099-DA was issued in April by the IRS. This form is a result of tax reporting guidelines that were suggested in August of last year. Which said that crypto brokers will be handled similarly to conventional brokers for items like stocks and bonds.
If certain cryptocurrency transactions occur, brokers or other businesses designated by the regulations would be required to submit Form 1099-DA on behalf of their clients. The tax office has included a wide variety of brokers on its preliminary list. These include kiosk operators, processors of digital asset payments, providers of hosted and unhosted wallets, and others.
The developers of the MetaMask wallet, Consensys, were critical of the preliminary form, saying that it might lead to duplicate transactions being reported since the definition of a broker was too wide and there weren’t enough specific instructions.
The blockchain company was also critical of the laws’ capacity to fix crypto’s data privacy problems. Consensys also raised the issue that brokers have little time to comply before the tax filing deadline, which is fast approaching.
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