In an urgining attempt to close the supposed “$50 billion crypto tax gap,” Democratic Senators, including Elizabeth Warren and Bernie Sanders, requested the Internal Revenue Service (IRS) and the Treasury Department to hasten the implementation of new tax regulations. They specified that waiting further might cost the government $1.5 billion in tax revenue for the 2024 financial year.
The Senators placed their concerns in the backdrop of new tax laws outlined in the Senate’s $1.2 trillion infrastructure bill passed in August 2021. The new regulations focus on enhancing tax reporting requirements for businesses acting as crypto brokers.
Although legislation is already anchored with these new laws, the stipulated rules by the Treasury and the IRS have yet to surface. According to the lawmakers, the delay is a loophole-in-waiting for tax evaders to siphon off billions of dollars every year from the U.S. government, potentially facilitated by crypto intermediaries.
The pressing urgency from the Senators comes as part of a larger conversation advocating for more transparency in the still-nascent cryptocurrency frontier. A survey commissioned by Grayscale Investments discovered that a sizable 59% of Democrats and 51% of Republicans regard crypto as the future of finance, potentially undermining Senator Warren’s severe crypto-stance, designed as the centerpiece of her Senate re-election campaign.
At the same time, Bernie Sanders, though quieter on the crypto front, has also appended his name on several letters steered by Warren, seeking to impose tighter restrictions on cryptocurrency practices.
While the proactive stand of certain lawmakers undeniably pressures the IRS and the Treasury, the question of their efficacious response remains. The gulf between the expectations and the concrete actions taken towards securing governmental revenues against crypto tax evaders exposes a fracture point in the U.S crypto policy execution.
Injecting speed into the process can potentially close the tax gap while also signaling a firm governmental stance against tax evasion. However, the struggle for urgency and the long-ingrained procedural pace of agencies like the IRS and the Treasury offer glimpses into the complexities of enforcing cryptocurrency regulations.
Source: Cointelegraph
