A number of United States’ lawmakers have urged the Internal Revenue Service (IRS) and the Treasury to speed up the closure of tax loopholes being exploited by “crypto tax evaders.”
In an Aug. 1 letter, Democratic Senators Elizabeth Warren, Bernie Sanders, Bob Casey and Richard Blumenthal warned the top officials of both agencies that they must swiftly act on new tax regulations.
The Senators claim there is a “$50 billion crypto tax gap” and the IRS and Treasury risk missing out on roughly $1.5 billion in tax revenue for the 2024 financial year if a tax policy update is delayed.
“Given the chance, tax evaders and the crypto intermediaries willing to aid them will continue to game the system, exploit loopholes, and siphon off billions of dollars a year from the U.S. government. You must not give them that chance.”
The senators are referring to new tax laws outlined in the Senate’s $1.2 trillion infrastructure bill passed in August 2021. The bill aimed to increase the tax reporting requirements for businesses acting as crypto brokers.
“Nearly two years have passed since the law was enacted, and the implementation deadline is less than six months away — but Treasury has yet to publish proposed rules,” the letter reads.
While the bill has been signed into law the Treasury and the IRS are yet to release their new tax rules. The agencies have until Dec. 31, 2023, to publish and implement the rules but the lawmakers are requesting they be put in place much sooner.
Elizabeth Warren has been an outspoken critic of the cryptocurrency industry in the U.S., going as far as forming an “anti-crypto army” as the centerpiece of her Senate re-election campaign.
Sanders — while more publicly quiet on crypto compared to his Democratic counterparts — has co-signed a number of letters headed by Warren seeking to impose tighter restrictions on the space.
A recent poll commissioned by Grayscale Investments found that 59% of Democrats and 51% of Republicans consider crypto to be the future of finance suggesting Warren’s stance may not prove to be a vote-winner among the majority of the population.