Cryptocurrencies

The Chamber of Digital Commerce, a leading trade association in the blockchain sector, provided comments.

The Chamber of Digital Commerce, a leading trade association in the blockchain industry, has submitted comments on the IRS’ proposed Form 1099-DA, which aims to report digital asset transactions.

The House’s detailed response aims to simplify the model, make it easier to use intermediaries that manage digital assets such as cryptocurrencies, and address taxpayer privacy concerns, including the need to only request the information necessary for the reporting of digital asset transactions by taxpayers.

Comments on the room

The chamber criticized the draft form because it requested too much information. He suggests that the final form only requires information necessary for basic tax reporting, while brokers should retain additional details for use in specific IRS audits.

Source: Digital Room

The chamber also raised concerns about the form’s request for sensitive information, such as transaction identifiers and digital asset addresses. They say such details could infringe on taxpayer privacy and should only be collected if criminal activity is suspected.

The comments indicate that the draft model indicates the need for specific intermediate instructions, which are not included. The Chamber advises the IRS to publish these instructions for public review before finalizing the form to ensure that brokers are able to complete it accurately.

Related: Blockchain Association Literally Challenges IRS Broker Rule

The chamber proposed that the model allow brokers to indicate whether digital assets are subject to a different tax rate, such as non-fungible tokens (NFTs) which could be treated as collectibles and taxed at a higher rate. pupil. This will help avoid errors in IRS processing and ensure accurate tax reporting.

Model project

The IRS published the draft model on April 18, 2024, and requested comments in the Federal Register on April 22, 2024. The House’s contribution follows its previous comments on related proposed regulations filed in November 2023.

According to the draft form, brokers will prepare Form 1099-DA for each client who sells or trades digital assets. Intermediaries include kiosk operators, digital asset payment processors, hosted wallet providers, unhosted wallet providers and others.

After the proposed reporting requirements were announced, the cryptocurrency community commented on them. The Blockchain Association said the rule contained “a fundamental misunderstanding about the nature of digital assets and decentralized technology.”

review: Beyond Cryptocurrency: Zero-Knowledge Evidence Shows Possibility of Voting and Even Funding.

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