Consensys asks the IRS to postpone the introduction of cryptocurrency tax regulations

Blockchain development company Consensys has written to the U.S. Internal Revenue Service asking for a postponement of tax rules that would require brokers and exchanges to report certain types of cryptocurrencies.

Bill Hughes, a lawyer at Consensys, said in Post currently include entities that traditionally have no reporting obligations.”

In April, the IRS released an early version of Form 1099-DA. The source of the proposed regulations is the IRS’s efforts to treat cryptocurrency brokers the same as traditional financial brokers for tax reporting purposes. This includes issuing a Form 1099-DA for certain cryptocurrency transactions

Brokers are listed on the draft form as digital asset payment processors, hosted and unhosted wallet providers, kiosk operators and others.

Consensys argues: “For example, there was no published draft form containing instructions for brokers, which presents an insurmountable challenge when asked to create a draft implementation plan. In short, it is not clear how to report in several fields of the form design.

The company also added that the form could potentially harm US companies specializing in blockchain user interfaces and self-service wallets. Additionally, concerns were raised about data privacy issues and the limited time brokers have to comply with the new requirements before upcoming tax filing deadlines.

Bill noted, “We believe the draft form further illustrates the need to delay the effective date of any reporting requirements that would apply to a software developer such as Consensys, as well as the need for a multiple broker rule.”

Also Read: Consensys Files Lawsuit Against SEC Over Ethereum Regulation