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.
Linda Z. Swartz
Partner
T. +1 212 504 6062
linda.swartz@cwt.com
Adam Blakemore
Partner
T. +44 (0) 20 7170 8697
adam.blakemore@cwt.com
Jon Brose
Partner
T. +1 212 504 6376
jon.brose@cwt.com
Andrew Carlon
Partner
T. +1 212 504 6378
andrew.carlon@cwt.com
Mark P. Howe
Partner
T. +1 202 862 2236
mark.howe@cwt.com
Catherine Richardson
Partner
T. +44 (0) 20 7170 8677
catherine.richardson@cwt.com
Gary T. Silverstein
Partner
T. +1 212 504 6858
gary.silverstein@cwt.com