U.S. Crypto Tax Revision

A bipartisan group of U.S. lawmakers is urging the Treasury to reconsider its digital-assets taxation proposal.

Led by Chairman Patrick McHenry (R-NC) and Congressman Ritchie Torres (D-N.Y), nine lawmakers joined the effort, denouncing the tax reporting requirement as "unworkable."

They support concerns raised by crypto representatives and lawyers who view the proposed taxation scheme as a "dangerous and improper overreach."

Challenges to Proposed Regulation

In a letter dated 10 November and addressed to U.S. Treasury Department’s Assistant Secretary Lily Batchelder, the lawmakers highlighted issues with the proposed regulation.

They expressed concerns about the broad definition of a digital asset "Broker," inadequate definition of a "Digital Asset," and an unreasonably short comment period.

Screenshot from the letter addressed to U.S. Treasury Department’s Assistant Secretary Lily Batchelder

The announcement made the letter public on Wednesday.

Crypto Tax Rule and Public Response

The crypto tax rule, introduced in August, underwent a public comment period that concluded on Monday, 13 November, accumulating over 124,000 comments.

During an audio-only hearing, officials hinted at the possibility of revising the tax proposal based on industry feedback.

A final version, expected months later, might incorporate responses to industry concerns.

The primary contention revolves around how the proposal categorises hosted wallet providers, payment processors, some decentralised finance (DeFi) entities, and others as "brokers" for tax reporting purposes.

The letter from the lawmakers contends that the definition of a "Broker" is excessively broad, potentially covering entities that lack the traditional characteristics of a broker.

This has sparked concerns within the digital asset community.