Several US senators are urging the IRS and Treasury Department to accelerate efforts in closing tax loopholes that have been exploited by "cryptocurrency tax evaders." In a letter dated August 1, Democratic Senators Elizabeth Warren, Bernie Sanders, Bob Casey, and R Richard Blumenthal called on senior officials from these agencies to take swift action in implementing new tax regulations.
The senators pointed out that there exists a "$50 billion cryptocurrency tax gap" and cautioned that delaying the tax policy update could result in the IRS and Treasury missing out on around $1.5 billion in tax revenue for the fiscal year 2024. They emphasized that tax evaders and cryptocurrency intermediaries are likely to exploit the system and its loopholes, leading to substantial financial losses for the US government if not addressed promptly.
The senators referred to the tax law outlined in the $1.2 trillion infrastructure bill, which was passed by the Senate in August 2021. This bill aims to enhance tax reporting requirements for cryptocurrency brokerage businesses. Despite being signed into law, the Treasury ry Department and IRS have not yet released new tax regulations related to it. These agencies have until December 31 to issue and implement the rules, but the lawmakers are calling for faster implementation.
Elizabeth Warren has been a prominent critic of the US cryptocurrency industry and has made creating an "anti-cryptocurrency army" a key focus of her Senate re-election campaign. Bernie Sanders, though less vocal about cryptocurrencies in public compared to his Democratic counterparts, has joined multiple letters led by Warren that seek tighter restrictions on the sector.
A recent poll commissioned by Grayscale Investments revealed that 59 percent of Democrats and 51 percent of Republicans believe cryptocurrencies are the future of finance. This suggests that Warren's stance might not align with a majority of voters' views on the potential of cryptocurrencies in the financial landscape .
