The controversial tax schedule has not yet been finalized.
The United States Internal Revenue Service (IRS) released a draft version of its 1099-DA reporting form on April 19, and controversially included non-custodial cryptocurrency wallets in its target range.
Ji Kim, chief legal and policy officer at the Crypto Innovation Council, said the IRS’s move was unfortunate because it failed to recognize that non-custodial wallet service providers have limited knowledge of cryptocurrency transactions and the parties involved in each transaction.
Shehan Chandrasekera, head of tax at CoinTracker, also criticized the form, noting that it could have an impact on regular users, who may need to undergo a Know Your Customer (KYC) verification process when creating a non-custodial wallet or using it with services such as decentralized finance (DeFi) platforms.