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Coinbase said new tax proposals by the Internal Revenue Service (IRS) may endanger the US crypto industry and impose ”unprecedented, unchecked, and unlimited tracking on the daily lives of Americans.”
Its concerns were outlined in an Oct.12 letter to the U.S. tax agency, in which it argued that the proposals for new reporting requirements are ”incomprehensible and unduly burdensome.”
JUST IN: #Coinbase is expressing opposition to a recent proposal put forth by the U.S. Internal Revenue Service (IRS).
They argue that this proposal has the potential to put the #crypto industry at risk and compromise the privacy of Americans.
— Crypto Headlines 📜 (@Idreesahmadjr) October 12, 2023
“They would enable government surveillance of the choices Americans make about their most private health care decisions, or even when they purchase a cup of coffee.” it said.
Coinbase’s letter came in response to a 300-page document introduced by the IRS in August. It contained proposals that originated from the Infrastructure Investment and Jobs Act that seek to broaden the definition of “broker” to include cryptocurrency exchanges.
Coinbase’s said the proposed changes aren’t fair in comparison to those for traditional financial institutions, and added that the timeframe for compliance is unrealistic.
It also says the proposals are excessively wide in scope and “not warranted or implementable,” and claims that the agency’s overreach may, ironically, hinder its enforcement efforts.
“The result will be services that are slower, costlier, and far less efficient,” it said, contradicting the agency’s modernization goal and its aim to make the tax system easier, faster, and simpler.
The Blockchain Association, a U.S. crypto advocacy group, has also opposed the proposals, warning that they may threaten the existence of the crypto industry.
Coinbase Has An Alternative Proposal
Coinbase suggests that the IRS revise the proposal to reduce the demands of compliance, focusing on parties directly participating in digital asset transactions, much like the rules applied in 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 observations and technical comments in a subsequent letter.
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