Legislators from both parties in the United States have asked the Treasury to amend the plan for taxes on digital assets. The group supports attorneys and representatives of the cryptocurrency industry who have referred to the proposed tax plan as “dangerous and improper overreach.”
Congressman Ritchie Torres (D-N.Y.) and House Financial Services Committee Chairman Patrick McHenry (R-NC) led a group of nine lawmakers in the effort, labelling the tax reporting requirement as “unworkable.”
The recent announcement, which made public the Nov. 10 letter addressed to Assistant Secretary Lily Batchelder of the U.S. Treasury Department, stated that “if finalised, the proposed regulation’s overly broad definition of a digital asset “Broker,” insufficient definition of a “Digital Asset,” and unreasonably short comment period threaten to prevent a large swath of the digital asset ecosystem from continuing to exist in the United States.”
Following the submission of over 124,000 comments during the public comment period, which concluded on Monday, the crypto tax rule was proposed in August.
The tax plan may be “open for revision,” according to questions from industry representatives during a recent audio-only hearing. A final version that addresses at least some of the criticism from the industry is probably still months away.
The proposal’s classification of payment processors, hosted wallet providers, certain decentralised finance (DeFi) entities, and other entities as “brokers” for tax reporting purposes is the main point of contention. The letter claimed that the definition of “broker” was still too wide and would include organisations without the typical traits of a broker.