Coinbase Says New US Tax Proposals Threaten the Crypto Industry

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Coinbase said new tax proposals from the Internal Revenue Service (IRS) could endanger the US crypto industry and impose “unprecedented, unaudited and unrestricted tracking of Americans’ daily lives.”

His concerns were outlined in an Oct. 12 report letter to the US tax authorities, stating that the proposals for new reporting requirements are ‘incomprehensible and unnecessarily burdensome’.

JUST IN: #Coinbase expresses its opposition to a recent proposal from the US Internal Revenue Service (IRS).

They argue that this proposal has the potential to… #crypto industry and endangers the privacy of Americans.

— Crypto Heads ???? (@Idreesahmadjr) October 12, 2023

“They would allow government oversight of the choices Americans make about their most private health care decisions, or even when they buy a cup of coffee.” it said.

Coinbase’s letter came in response to a 300 page document introduced by the IRS in August. It included proposals arising from the Infrastructure Investment and Jobs Act that aimed to expand the definition of “broker” to include cryptocurrency exchanges.

Coinbase said the proposed changes are not fair compared to those for traditional financial institutions, adding that tThe timeline for compliance is unrealistic.

It also says the proposals are excessively broad in scope and “are not justified or feasible,” claiming that the agency’s overreach could, ironically, hamper its enforcement efforts.

“The result will be that services will be slower, more expensive and far less efficient,” the report said, contradicting the agency’s modernization goal and its goal of making the tax system simpler, faster and simpler.

The Blockchain Association, a US crypto advocacy group, has also opposed the proposals, warning that they could threaten the survival of the crypto industry.

Coinbase has an alternative proposal

Coinbase suggests that the IRS revise the proposal to reduce compliance requirements, focusing on parties that directly participate in digital asset transactions, similar to the rules applied to traditional financial activities.

The IRS will continue to accept public comments on these proposals until October 30, with a public hearing scheduled for November 7. Coinbase plans to submit further detailed comments and technical comments in a subsequent letter.

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