The Internal Revenue Service (IRS) is steaming ahead with new legislation designed to streamline the taxation process for digital assets. This advancement sees the emergence of proposed Form 1099-DA, designed to take the sting out of tax return preparations for crypto investors. This in-kind measure allows parity with traditional asset reporting, and the proposed form should simplify the process and negate the need for detailed calculation or pricey tax preparation services.
This proposal is another step taken by the Biden administration as part of the Infrastructure Investment and Jobs Act (IIJA). The regulations, which are expected to be effective from 2026, allegedly have the potential to raise a staggering $28 billion in new tax revenue over the next decade.
However, not all experts in the field are thrilled by the announcement. Kristin Smith, CEO of the Blockchain Association, expressed her concerns over the broad-brush approach to traditional and digital asset regulation. DeFi Education Fund CEO, Miller Whitehouse-Levine, labeled the proposal as “confusing, self-refuting, and misguided”.
Patrick McHenry, the House of Representatives Financial Services Committee chairman, argues that this is another attack on the digital asset world by the Biden administration. Advocacy group Coin Center has also expressed concern, indicating potential privacy issues related to digital assets. As the official comment period runs until October 30, with a public hearing following, it’s clear we’re in for rigorous debate surrounding this proposal.