The IRS is Being Flooded with Crypto Bots Amidst the Rain
On August 29, 2023, the IRS issued proposed crypto reporting regulations (the “Proposed Regulations”), which we discussed in detail here. The Proposed Regulations build on the 2021 changes to the Internal Revenue Code that broadened the definition of “broker” to include “any person who (for consideration) is responsible for regularly providing any service effectuating transfers of digital assets on behalf of another person,” which we discussed here.
According to the IRS, the Proposed Regulations garnered “strong public interest,” resulting in the submission of over 125,000 comment letters, some of which are believed to be AI-generated. Many letters, such as this one here, requested removing stablecoins and non-fungible tokens from the definition of “digital asset.” Several others, such as this one here, recommended eliminating the requirement to report transaction IDs and wallet addresses. Numerous others, such as this one here, claimed the definition of “broker” is too broad. Many others, such as this one here, raised privacy and data security concerns. And finally, a significant number, such as this one here, requested delaying the effective date for implementing the regulations.
Approximately 44,800 of the over 125,000 comment letters are publicly available here.
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