US Government To Delay Data Tracking That Will Push Crypto Tax Collection Further

Vignesh Karunanidhi
US Government To Delay Data Tracking That Will Push Crypto Tax Collection Further
Source: Bitcoinist

The US government is slowing down on its decision to collect billions in crypto tax as the authorities delay data collection. The Biden government is slowing down on its decision to collect detailed information about clients’ trading details from crypto brokers and exchanges.

According to a Bloomberg report, the Internal Revenue Service and Treasury Department have likely pushed the date for data tracking to January as per the details provided by people familiar with the matter. The data to be collected will include capital gains and losses of the customers. The names are kept hidden as the decision has not yet been finalized. With the change, the tax office would have to wait longer to obtain the same information that it does for stocks or bonds.

Source: Tax Law Canada

Crypto tax evasion is a major issue everywhere

Crypto tax evasion is not just an issue faced by the United States policymakers, but also a major issue faced by governments across the country. The lack of a well-framed regulation for crypto and tax collection is creating issues among policymakers across the globe.

Treasury and the IRS have battled to swiftly create regulations that businesses will employ to gather and disclose data on the transactions of their clients.

In November of last year, Congress passed a law that required crypto firms to keep a directory of detailed transactions of clients in 2023. The reports were also supposed to be sent to the IRS the next year.

Source: Tax Audit

The crypto industry has been groaning about the crypto legislation that has been prepared broadly. The IRS and the Treasury both declined to comment on the potential holdup. Officials have already delayed start dates for information-reporting laws in other sectors, despite the fact that their efforts in the domain of cryptocurrency are still relatively new.

The rules, once in place, will require the brokerages and exchanges to send detailed information on client transactions to the IRS, which will be utilized to file the crypto tax returns of the respective users. The data will also help in assisting the authorities to catch crypto tax evaders.

“It could be very helpful just to standardize the reporting and put it in a way that makes it easier to digest and put on a tax return.”

Michael Desmond, former chief counsel for the IRS