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The US treasury department is moving to crack down on crypto users who may be failing to pay taxes, while providing more clarity for the digital assets sector.
The US government under president Joe Biden’s administration have revealed new proposed rules around the reporting of digital assets such as cryptocurrencies.
The 282-page proposal by the US treasury department includes the creation of a new tax form called 1099-DA, which will help taxpayers determine if they owe taxes.
The rules are part of a broader push in the US to crack down on crypto users who may be failing to pay taxes, while providing greater clarity for the country’s digital assets market, Reuters reports.
However, the proposal claims these measures will also reduce the costs for digital asset owners in terms of monitoring and tracking their own assets.
“These reduced costs and the increased confidence potential digital asset owners will gain as a result of brokers being compliant with federal tax laws will likely increase the number of digital asset owners and may increase existing owners’ trade volume,” the proposed rules state.
The US department claims that many digital asset holders currently have to closely monitor and maintain their own records for tax purposes, due to the “volatile nature of digital asset values”, which can be complicated and time-consuming.
“Those potential digital asset owners who have little experience with accounting for digital assets may have been unwilling to enter the market due to the high learning and record maintenance costs,” the document says. “Eliminating these high entry costs will allow more potential digital asset owners to enter the market.”
The proposed rules also clarify the definition of a “broker” to include digital asset trading platforms, crypto payment processors and certain online wallets.
The US crypto sector has increased regulatory pressure in recent months, as the US Securities and Exchange Commission (SEC) took aim at some of the biggest exchanges operating in the country.
In June, the US sued both Coinbase and Binance in the same week and claimed both crypto exchanges had acted unlawfully in the country.
Coinbase has previously argued that the US does not have a functioning market in digital asset securities due to “the lack of a clear and workable regulatory regime”. The company had been trying to get the SEC to sign a petition around adopting rules around securities regulation and to “identify which digital assets are securities”.
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