Prolly nothing... https://www.reuters.com/markets/us/...ls-new-crypto-tax-reporting-rules-2023-08-25/ iden administration unveils new crypto tax reporting rules By Hannah Lang August 25, 20239:58 AM PDTUpdated 9 hours ago Aug 25 (Reuters) - Cryptocurrency brokers, including exchanges and payment processors, would have to report new information on users' sales and exchanges of digital assets to the Internal Revenue Service (IRS) under a proposed U.S. Treasury Department rule published on Friday. The rule is part of a broader push by Congress and regulatory authorities to crack down on crypto users who may be failing to pay their taxes. A proposed new tax reporting form called Form 1099-DA is meant to help taxpayers determine if they owe taxes, and would help crypto users avoid having to make complicated calculations to determine their gains, the Treasury Department said. It would also subject digital asset brokers to the same information reporting rules as brokers for other financial instruments, such as bonds and stocks, Treasury said. Under the proposal, the definition of a "broker" would include both centralized and decentralized digital asset trading platforms, crypto payment processors and certain online wallets where users store digital assets. The rule would cover cryptocurrencies, like bitcoin and ether, as well as non-fungible tokens. Brokers would need to send the forms to both the IRS and digital asset holders to assist with their tax preparation. The new requirements stem from the $1 trillion 2021 Infrastructure Investment and Jobs Act, which included a provision that aimed to increase tax reporting requirements for digital asset brokers. It instructed the IRS to define what firms qualified as crypto brokers and provide forms and instructions for reporting. It also extended reporting requirements for certain cash transactions of more than $10,000 to digital assets. At the time the bill was passed, it was estimated that the new rules could bring in close to $28 billion over a decade. The Treasury proposed that the rules would be effective for brokers in 2025 for the 2026 tax filing season. "This is part of a broader effort at Treasury to close the tax gap, address the tax evasion risks posed by digital assets, and help ensure that everyone plays by the same set of rules," the Treasury said in a statement. The crypto industry had mixed reactions to the proposal. Blockchain Association CEO Kristin Smith said in a statement that if done correctly, the new rules "could help provide everyday crypto users with the necessary information to accurately comply with tax laws." Miller Whitehouse-Levine, CEO of the DeFi Education Fund, a lobbying group focused on decentralized finance, said the proposed approach would neither make filing taxes easier nor improve tax compliance. "Today's proposal from the IRS is confusing, self-refuting, and misguided. It attempts to apply regulatory frameworks predicated on the existence of intermediaries where they don't exist," he said in a statement. The IRS currently requires crypto users to report on their tax returns many digital asset activities, including trading cryptocurrencies, regardless of whether the transactions resulted in a gain. Users are required to make that calculation themselves, and the platforms on which digital assets trade do not give the IRS that information. Several Democratic senators, including Elizabeth Warren, urged the Treasury in a letter sent earlier this month to quickly implement the rules, arguing that otherwise tax evaders and crypto intermediaries “will continue to game the system.” The Treasury Department and the IRS are accepting feedback on the proposal until Oct. 30. They will also hold public hearings on the proposal on Nov. 7-8. Reporting by Hannah Lang in Washington, editing by Deepa Babington and Michelle Price
BITCOIN AND BITCOIN WALLETS AND PROJECTS DO NOT HAVE THIS PROBLEM I don't know if you remember a few months ago, Metamask wallet had an update that showed a disclosure that had everyone on ct freaked out? You had to acknowledge it, says something about collecting and reporting of IP addresses to the proper tax authorities and even go so far as setting aside (collecting) witholdings of crypto assets A lot of the defi ie dexes and yield farming crypto projects lately have been geo-blocking US ip addresses This is not only US, it applies to other countries that have similar crypto regulatory requirements, i.e. Canada, UK, Australia, (my guess) Metamask and their nodes (infura) are owned by a US company Consensys so they probably got a headsup of this in the works from the authorities That's why I PUT ON MY THREAD GUIDE use South Korea on VPN for Metamask... or use a different wallet and backend servers (not a recommendation but been looking into Rabby as another wallet competitor to Metamask) Or move to Asia, or Dubai or other clear and fair regulatory environments for cryptos. I know I did
Hope they formalize this. Lack of 1099 reporting was holding me back from rolling the dice with things like Elephant Money.
This of course solves everything. I guess they can always catch 10-20% who will be stupid enough to not hide their location, but its just funny to think that if someone is smart enough to use all of these services, they wouldn't be trying to at least protect their privacy. Had no idea since I never use Metamask. I just never got around to buying or trading anything more exotic than what you could get on a big exchange.
Metamask and similar wallets are needed for interacting with smart contracts, i.e. dexes and defi (borrow/lend) platforms but the main function of any crypto wallet is to self-custody the private keys
Some of the players will try to comply to the US (i.e. Metamask, or Uniswap) but many will not be able to even if they wanted Ultimately, the burden will be on US crypto users, either explicitly banned by crypto projects from participating or they (US crypto users) will have to knowingly violate these US regulations, or subject themselves to a lot of work to gather and present records to the US authorities The US regulators proposing all of these are not clueless, the end goal is to kill decentralized Bitcoin and decentralized crypto digital assets in the US Prolly nothing...
It sounds more like it's an attempt to prevent some types of crypto-related fraud. Haven't cryptonians been asking for regulation for years?
You actually believe that BS? lol First time I heard that term before, I am Superman! fair regulations I'm in Asia and every single crypto company that operates here is regulated. Every single one But DeFi crypto projects are not... simply because they exist on the internet, on the blockchain and cannot possibly comply to any single country's regulations If you do not understand it, dyor
Interesting video. The sad part is that the current state of affairs seems to be like they have no idea what is going on. You've got a border crisis that is allowed to continue, and criminals in places like California who are running the show. It could very well be that they are letting all this happen so that they can later say they require total control in order to fix the problem. So it doesn't surprise me one bit. But the core of the US model and reason for success is rooted in innovation and freedom. Because of how quickly information travels now, I don't think this will ultimately be successful. By going full on dystopian, the US will actually fall into tyranny and turn into North Korea or China. This will literally mean that the US hands over they superpower status to someone else. I just don't think a superpower can remain unless the citizens have freedom and prosperity. So if the US wants to piss away their advantage, it will be their own doing. Elio stated in the video that he thinks too many developers won't want to leave the US, but I figure there will be many other places that start to look more attractive if the US tightens its grip on freedom and liberty. I have no idea why anyone would want to live in San Francisco based on all the crime videos I see, so if you crack down on crypto and tech innovation, "not wanting to leave" will in fact turn into "can't wait to leave". Anyway... this is all theoretical, so it doesn't matter much at this point since there are far too many unknowns.