The US Internal Revenue Service (IRS) published a lengthy bill regarding taxation of profits from cryptocurrencies. The text contains more than 100,000 words and takes approximately 6 hours to read in full.
In any case, the highlight of the text is the obligation of cryptocurrency brokers to provide their customer data to the US IRS. Even decentralized cryptocurrency exchanges and wallets would have to provide this data, which would have a major impact on the decentralized finance (DeFi) industry.
“The Treasury Department and the IRS expect that this clarified proposed definition will ultimately require operators of some platforms commonly referred to as decentralized exchanges to collect customer information and report sales information about their customers, if those operators qualify as brokers.”points to an excerpt from the US IRS text.
The cryptocurrency tax bill received more than 120,000 responses
While US citizens took a whole day to read the IRS bill, the US agency will also have to take the time to read the comments. In total, more than 124,000 responses were received.
Some of these comments come from large companies. For example, Nasdaq-listed broker Coinbase argues that the proposed new rules are terrible for the privacy of Americans. After all, all your data would be made public without your permission.
“The new rules from the Internal Revenue Service (IRS) are harmful to your privacy. Join the more than 119,000 Americans who have already spoken out to make privacy an issue the IRS cannot ignore.”
The new IRS rules are bad for your privacy. Join the more than 119,000 Americans who have already spoken out to make privacy an issue the IRS cannot ignore.
Last chance to submit a comment → https://t.co/7UI2SKANeG https://t.co/NfuFWkdrrN
— Coinbase 🛡️📞 (@coinbase) November 8, 2023
However, it is possible that the large number of responses is related to the use of artificial intelligence. Using a tool called US Treasury Reg Raid, Americans can generate personalized texts against the new laws.
“I am writing to express my deep concerns and strong opposition to the proposed regulations discussed in the document […] While I understand the need for transparency and accurate reporting, I believe these regulations violate our privacy and jeopardize the security of our sensitive financial data, including our Social Security numbers.”refers to an excerpt from a text written by the AI.
Among the options shown by the AI are the user’s concern about the bill, as well as the tone of the message (patriotic, nervous, pessimistic, etc.). In other words, AI can cause spam, but also help people who don’t have time to write a good comment.
Regardless of who wrote it, US regulators will need a significant amount of time to read all the notes. Some comments can be read on the project page, but it is difficult to understand which comments were written by an AI or a human.
The US needs money and demands compensation from cryptocurrency investors
As recently as May, US President Joe Biden stated that cryptocurrency investors were endangering the food of 1 million people. Therefore they should be taxed. His speech was repeated in June. Others in the crosshairs of the US tax authorities were billionaires.
On the plus side, some believe that the US government recognizes cryptocurrencies as a legal asset. In other words, cryptocurrencies are not at risk of being banned in the US, thus avoiding a situation similar to what happened in China.
Finally, it is worth considering that the US has run out of money and is on the verge of a “shutdown”, that is, it may close some sectors due to lack of money. That is why the taxation of cryptocurrencies takes place, in short, to finance government expenditure.
Source: Live Coins
Barry Siefert is an accomplished journalist and author at The Nation View. He is known for his expertise in the field of cryptocurrency, and has written extensively on the topic. With a background in finance and economics, Barry has a deep understanding of the underlying technology and market forces that drive the crypto industry.
