U.S. lawmakers urge Treasury to revise proposed digital asset tax filing rules

Several U.S. lawmakers, including Chairman of the U.S. House of Representatives Financial Services Committee Patrick McHenry and Ritchie Torres, wrote to the U.S. Treasury Department on November 15 to express their concerns about the proposed crypto asset tax reporting rules, saying that the proposed regulations may stifle innovation and undermine Adverse effects on the crypto-asset ecosystem. The letter specifically addresses tax rules proposed by the U.S. Treasury Department on August 25, with U.S. lawmakers deeming the proposed rules “unworkable” and arguing that the rules in their current form could hinder innovation and harm the digital asset ecosystem. The letter states that the new rules will expand the definition of the term “broker” to apply to a variety of crypto asset services, which explicitly includes DeFi services. Lawmakers believe the rule might even apply to DeFi platforms, which often don’t know users’ identities, and could require many digital asset services to submit duplicate tax reports. Lawmakers are concerned that an overly broad or poorly defined term “crypto-asset” could include NFTs and payment stablecoins, which could complicate regulation. They believe that these assets should not be considered financial instruments or investment vehicles respectively. Lawmakers also considered the comment period and implementation deadline for the proposed regulations "unreasonably short" and requested that the deadline be extended to December 31, 2023. (Cryptoslate)