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 <h2 id="strong-crypto-exchanges-and-investors-to-report-holdings-strong"><strong>Crypto Exchanges and Investors to Report Holdings</strong></h2> 
 <p><span style="font-weight: 400">According to the document, cryptocurrency brokers would be expected to report new information on users’ sales as well as the transfer of digital assets to the Internal Revenue Service (<a rel="noopener noreferrer nofollow" title="IRS" href="https://thebittimes.com/tag/irs.html">IRS</a>).&nbsp;</span></p>  
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 <p><span style="font-weight: 400">These brokers include exchanges, payment processors, and certain hosted wallets and they will be </span><span style="font-weight: 400">required</span><span style="font-weight: 400"> to report earnings on digital assets including Bitcoin (BTC), Ethereum (ETH), and even Non-Fungible Tokens (NFTs).&nbsp;</span></p> 
 <p><span style="font-weight: 400">Decentralized exchanges are not particularly left out as they will also need to retrieve users’ information and conduct the other necessary reporting.</span></p> 
 <p><span style="font-weight: 400">This proposed rule is part of the 2021 Infrastructure Investment and Jobs Act that included crypto language to increase reporting made by brokers on customers’ crypto activity. The Treasury Department claims to be doing this so that “everyone plays by the same set of rules.”&nbsp;</span></p>  
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 <p><span style="font-weight: 400">Precisely, crypto brokers will be expected to provide financial reports for tax purposes just like brokers for traditional assets like stocks and bonds.</span></p> 
 <h2 id="strong-irs-challenges-unlawful-crypto-tax-benefits-strong"><strong>IRS Challenges Unlawful Crypto Tax Benefits</strong></h2>  
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 <p><span style="font-weight: 400">Meanwhile, U.S. prosecutors and the <a rel="noopener noreferrer nofollow" title="IRS" href="https://thebittimes.com/tag/irs.html">IRS</a> already feel like some crypto whales are enjoying </span><span style="font-weight: 400">unlawful tax benefits</span><span style="font-weight: 400"> from other regions like Puerto Rico. This observation has likely contributed to the introduction of the new rule.</span></p> 
 <p><span style="font-weight: 400">There is already an existing system where taxpayers owe taxes on gains and then remove their losses on digital assets. However, the Treasury Department pointed out that this system is not sufficient as it is difficult for these taxpayers to calculate gains.&nbsp;</span></p> 
 <p><span style="font-weight: 400">Therefore, under this new rule, crypto brokers are expected to provide their customers (taxpayers) with a new Form 1099-DA which will help them understand if they currently owe tax according to the crypto tax reporting guidelines.</span></p> 
 <p><span style="font-weight: 400">“This decision was made because the reasons for requiring information reporting on dispositions of digital assets do not depend on the manner by which a business operating a platform effects customers’ transactions,”&nbsp;the <a rel="noopener noreferrer nofollow" title="U.S. Treasury" href="https://thebittimes.com/tag/u-s-treasury.html">U.S. Treasury</a> Department explained.</span></p> 
 <p><span style="font-weight: 400">Noteworthy, this proposed rule is not effective until 2025 after which crypto brokers would be expected to bring in $28 billion into the agency in the course of 20 years.</span></p> 
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US Treasury Unveils Crypto Tax Reporting Guidelines

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