According to Odaily Planet Daily, the blockchain advocacy organization Blockchain Association opposes the broker rules proposed by the U.S. Internal Revenue Service (IRS), arguing that these regulations will impose excessive burdens on investors, cryptocurrency companies and the IRS itself. The association cited the Paperwork Reduction Act, pointing out that government regulators should not impose unnecessary paperwork requirements on individuals and entities in the financial system.
If these rules are passed, 8 billion more tax returns will be filed, 4 billion hours of processing time will be wasted, and annual compliance costs will reach $254 billion. In comparison, the IRS estimated that the total compliance costs of the new rules were $136 million in the early days. The association believes that the annual compliance costs of $245 billion are unreasonable for a market that will generate a tax gap of up to $10 billion.
In 2023, the association submitted a 39-page letter detailing its comprehensive objections to the regulations, arguing that the rules would make it extremely difficult for decentralized financial protocols to comply and reflected the government’s misunderstanding of blockchain and cryptocurrency.