Blockchain Association Opposes IRS Broker Rule

Blockchain advocacy group Blockchain Association opposes broker rules proposed by the Internal Revenue Service (IRS), saying that these regulations will place an excessive burden on investors, cryptocurrency companies and the IRS itself. Citing the Paperwork Reduction Act, the association pointed out that government regulators should not impose unnecessary paperwork requirements on individuals and entities in the financial system. The letter mentioned that if these rules are passed, 8 billion tax returns will be added, 4 billion hours of processing time will be wasted, and annual compliance costs will reach $254 billion. In contrast, the IRS earlier estimated that the total compliance costs of the new rules would be $136 million. In addition, the association believes that the annual compliance costs of $245 billion are unreasonable for a market that generates a tax gap of up to $10 billion. In 2023, the association submitted a 39-page letter detailing its comprehensive objections to these regulations, arguing that these rules are extremely difficult for decentralized financial protocols to comply with and reflect the government's misunderstanding of blockchain and cryptocurrency.