IRS 'Raided' by Crypto Investors as Industry Puts Up Fight Against U.S. Tax Proposal.

The Internal Revenue Service's audio-only hearing today will draw views from the crypto industry on what threats the digital assets advocates see embedded in the proposed new tax approach being contemplated for cryptocurrencies.

The U.S. Internal Revenue Service (IRS) is gathering the final words now from a crypto sector that is arguing the agency's proposal for a digital-assets taxation regime is an existential threat to investor privacy and to decentralized crypto projects.

After a comment deadline and a public hearing on Monday, the U.S. Department of the Treasury's tax arm will have a mountain of more than 120,000 comments to sift through – aided in some instances by the wordsmithing of artificial intelligence tied to such campaigns as the LeCpunK Army's "Treasury Raid."

Monday's hearing – confined to audio – will gather prominent crypto advocates to lay out their arguments on this proposal that maps out how crypto brokers and investors would report transactions to the IRS.

The new taxation system – which won't become final until IRS officials weigh the input, rewrite a final version and approve it – has drawn industry ire that's partially focused on how the proposal would define a "broker" that needs to comply.

A comment from Americans for Tax Reform says the government's scope for brokers is pursuing "a broad definition that includes entities incapable of reporting the applicable transactional information." The group argued that "the IRS wants to rope DeFi into the reporting regime to ensure that other entities do not convert to DeFi entities and circumvent reporting requirements.

Despite the objections, there is a general bright side for a crypto taxation approach in the U.S. Establishing rules and forms for how investors report their gains would eliminate one of the central impediments toward wider interest in cryptocurrencies: uncertainty over how to figure out what one owes in taxes.