The implementation of a law enacted to track down crypto tax evaders has reportedly been delayed. This is believed to endanger billions of dollars in federal revenue, based on a statement by the Wall Street Journal (WSJ). This has raised frustration among the President's party, including Senator Elizabeth Warren and three other senators who are now pressuring the Biden administration to speed up the process.
This rule was originally planned for the current tax year, implementation of this 2021 law is seen as uncertain for the 2024 tax year due to continued delays. The law, intended to close loopholes that allow crypto investors to avoid taxes, is predicted to generate $28 billion in additional federal revenue over a decade.
“Given the chance, crypto tax evaders and the crypto intermediaries willing to help them will continue to manipulate the system, exploit existing loopholes, and divert billions of dollars a year from the US government. We cannot give them that opportunity," wrote Senators Warren, Bob Casey, Richard Blumenthal, and Bernie Sanders in a recent letter to Treasury officials.
Minimal action has been taken since the Internal Revenue Service (IRS) and Treasury Department clarified that brokers are not required to report any information until the final rule is issued. The Department of Finance has not made official steps to issue a proposal.
The rule will provide the IRS with increased information about the profits of crypto investors, warning investors that the IRS is aware of their earnings. According to tax attorney James Creech, these measures will also make tax compliance easier for crypto investors and could help standardize the industry.