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- 1 Two members of the US Congress raised the issue regarding the tax gap in the cryptocurrency industry.
- 2 The duo wrote a letter to the treasury secretary and IRS commissioner.
- 3 The duo demands to eradicate the tax gap and bring cryptocurrency also under the tax regime.
Daniel Warfel wrote to the Treasury Secretary and the IRS Commissioner demanding the crypto industry be taxed.
Crypto a Way to Avail Tax Exemption
The head of treasury and internal revenue service received a letter from the two members of the United States Congress. The letter states the need for tax regulations in the crypto industry and demands the same. The letter was addressed to Janet Yellen, the treasury secretary and Daniel Warfel, the IRS Commissioner. They highlighted their concerns regarding the false and fraudulent practices in crypto.
They stated that the Crypto industry has become a conduit for tax exemption. This has been done for years now and there is a huge gap between the industry and the nation’s tax regime. Here, nation refers to the United States.
Sherman and Lynch referenced the audit report of September 2020. They showcased the part where the TIGTA (Treasury Inspector General for Tax Administration) highlighted the IRS’s liability. TIGTA in that audit report showed that they could not verify or point out the crypto taxpayers which shows the lack of reporting.
The #Cryptocurrency industry has been a major source of tax evasion & a significant part of the nation's tax gap.
— Congressman Brad Sherman (@BradSherman) June 5, 2023
Today I, along with @RepStephenLynch, urged @USTreasury & #IRS to release proposed regulations that would bring the cryptocurrency industry into full tax compliance. pic.twitter.com/VgTlAzrOE4
The President of the United States, Joe Biden signed a new law in November 2022, the Bipartisan Infrastructure Bill or the Infrastructure Investment and Jobs Act. The law states that taxpayers need to report all of their crypto transactions. The law was to come into action from the start of 2023 but the congressmen claim that the law is yet to be executed.
Both the congressmen asked for the implementation of the law with regular effect. They believe doing so would eradicate the gap between the nation’s tax regime and the crypto industry.
Biden imposed a 30% Digital Asset Mining Energy (DAME) tax on cryptocurrency miners. This was considered part of Biden’s FY2024 budget for 2023 initially. But this DAME tax could not make it to the May legislation and it therefore raised the US debt ceiling.
As the 30% tax imposed was deflated, the crypto miners believe it is temporary. It means the tax would be imposed on cryptocurrency mining in one way or the other in future via some means.
White House on the other hand is silent about all the questions raised regarding the DAME tax.
Andrew is a blockchain developer who developed his interest in cryptocurrencies while pursuing his post-graduation major in blockchain development. He is a keen observer of details and shares his passion for writing, along with coding. His backend knowledge about blockchain helps him give a unique perspective to his writing skills, and a reliable craft at explaining the concepts such as blockchain programming, languages and token minting. He also frequently shares technical details and performance indicators of ICOs and IDOs.
