ChainCatcher reported that according to Cointelegraph, the blockchain advocacy organization Blockchain Association opposed the broker rules proposed by the U.S. Internal Revenue Service (IRS), saying that these regulations would impose excessive burdens on investors, cryptocurrency companies and the IRS itself.
The association cited the Paperwork Reduction Act, stating that government regulators should not impose unnecessary paperwork requirements on individuals and entities in the financial system. The letter mentioned that if these rules are passed, 8 billion tax returns will be added, 4 billion hours of processing time will be wasted, and the annual compliance cost will reach $254 billion. In comparison, the IRS estimated that the total compliance cost of the new rules was $136 million in the early days.
In addition, the association believes that the annual compliance cost of $245 billion is unreasonable for a market that generates 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 these rules are extremely difficult for decentralized financial protocols to comply with and reflect the government’s misunderstanding of blockchain and cryptocurrency.