Bitrabo Editorial
Two US Congressmen are holding crypto firms responsible for the country’s tax evasion problem. In a letter addressed to the Treasury and the Internal Revenue Service, the lawmakers are pushing for tax regulations specific to the digital asset sector. As it stands, taxpayers are required to report digital transactions starting from 2023 under the Infrastructural Investment and Jobs Act, but the lawmakers claim that these regulations have not yet been promulgated.
Crypto Firms Fingered as Culprits Behind Tax Gap
Congressmen Brad Sherman and Stephen Lynch penned the letter to Treasury Secretary Janet Yellen and IRS Commissioner Daniel Werfel focusing on tax compliance in the cryptocurrency industry. They argue that crypto firms are primarily responsible for the US tax gap.
The letter cites an audit report indicating a significant lapse in reports submitted by crypto firms. Consequently, the IRS is unable to identify taxpayers involved in digital assets.
Senator Sherman took to Twitter to question why the cryptocurrency industry does not comply with tax regulations. He called out the industry, stating that it has been a significant contributor to tax evasion and the nation’s tax gap. The Congressmen called for tax laws establishment to promote compliance within the digital sector. They believe that this would help seal all tax gaps in the industry.
US Digital Asset Mining Energy (DAME) Tax
President Biden’s administration has been aggressive in ensuring crypto taxation. In March 2023, a 30% tax on digital asset miners was announced as part of the Biden FY2024 budget. However, at present, the buzz surrounding the DAME tax seems to have died down. In May 2023, the authorities focused on raising the US debt ceiling rather than imposing the DAME tax on cryptocurrency miners. According to reports, the tax proposal seems to have been defeated, although the US administration may revisit tax laws in the future.
Featured image from Pixabay, chart from TradingView.com