The U.S. Internal Revenue Service (IRS) has extended the comment period on cryptocurrency reporting regulations by two weeks, with a new deadline of November 13, 2023.

In response to widespread interest and concern surrounding its proposed cryptocurrency reporting regulations, the U.S. Internal Revenue Service (IRS) has decided to extend the comment period by another two weeks.

The move provides stakeholders with more time to provide their views, with the new deadline being November 13, 2023. Previously, stakeholders had until October 30, 2023 to submit their views on the proposed regulations.

IRS gives public extra time to comment

The U.S. Treasury Department and the Internal Revenue Service have announced a two-week extension of the comment period for their proposed cryptocurrency reporting regulations. The update was announced in a Federal Register filing on Oct. 25, giving stakeholders more time to provide feedback.

The final date for feedback has been extended to mid-November in light of the significant public interest the rule has generated since it was published in August.

The proposed regulations focus on defining “brokers” in the crypto industry, including trading platforms, payment processors, digital asset custody wallet providers, and individuals who redeem digital assets they create or issue.

Notably, individual miners and validators in the crypto industry breathed a sigh of relief as they would no longer be classified as “brokers.” However, if passed, the proposed rules would impose additional compliance requirements on cryptocurrency companies, raising concerns among industry participants.

Lawrence Zlatkin, Coinbase’s vice president of tax, expressed his concerns about the proposed regulations, calling them “difficult to understand and overly burdensome” because of the new reporting requirements they would impose.

He also noted that the IRS could face a potential data overload, including transactions where "taxable income was zero or negligible" under the proposed rules.

Proposed Cryptocurrency Reporting Regulations

On August 25, 2023, the Treasury Department and the Internal Revenue Service proposed regulations to improve clarity and compliance with digital asset taxation.

IRS Commissioner Danny Werfel stressed that the rules are intended to eliminate confusion, establish clear reporting guidelines and promote compliance with tax laws.

Additionally, he stressed the importance of preventing the misuse of digital assets to conceal taxable income, especially for high-income individuals.

Under the proposed regulations, cryptocurrency brokers would have to adhere to the same regulatory standards as securities brokers. This includes filing information returns and providing payee statements for all clients and traders.

In addition, the Treasury Department also proposed to introduce a new 1099-DA form, which is specifically used to report non-employment income from digital assets to customers and clients. The measure is intended to help taxpayers effectively manage their tax obligations and give them a clearer understanding of their tax obligations related to digital assets. #国税局  #IRS