Senate Pushes for Quick Implementation of Cryptocurrency Tax Reporting Rules

Senate Urges Action on Crypto Tax Reporting

Seven U.S. senators, including well-known figures like Elizabeth Warren and Bernie Sanders, are pushing the Treasury Department and the IRS to quickly implement new tax reporting requirements for cryptocurrency brokers. In a letter sent on October 10 to Treasury Secretary Janet Yellen and IRS Commissioner Daniel Werfel, they criticized a two-year delay set for rule implementation, which is now slated for 2026 due to transactions occurring in 2025.

The Cost of Delay

The senators argue that postponing these rules could lead to an annual loss of around $50 billion in tax revenue for the IRS, while also allowing unscrupulous players within the crypto sector to evade taxes. The letter highlights the urgency of finalizing these regulations to prevent crypto lobbyists from undermining governmental efforts to regulate this largely unregulated sector. The lawmakers voiced their concern directly, stating,

“any delay would give crypto lobbyists even more opportunity to undermine the Administration’s efforts.”

Crypto and Controversy

In an eye-catching move, Senator Warren took to social media to link cryptocurrency to the controversial funding of Hamas amid its ongoing conflict with Israel. On October 11, she called crypto a “not-so-secret financial weapon” used by the group, emphasizing the need for tighter controls over digital assets. Following requests from Israeli authorities, the crypto exchange Binance reacted swiftly, freezing accounts tied to Hamas on October 10.

Public Engagement and Feedback

The proposed crypto tax reporting regulations, unveiled by the IRS in August, are still welcoming public comments until October 30. The new rules would require brokers to assist taxpayers in determining their tax liabilities on crypto transactions. The level of public engagement could influence how stringent these rules become.

A Divided Opinion on Regulations

Not everyone shares the same view on these regulations. Representative Patrick McHenry, currently serving as interim House Speaker, has labeled the proposed measures as an “attack on the digital asset ecosystem.” This highlights the divisive nature of cryptocurrency regulation in the U.S., yielding strong reactions and calls for comprehensive dialogue on the direction of cryptocurrency policy.