Elizabeth Warren and Bernie Sanders Call for Action to Close the ‘$50 Billion Crypto Tax Gap

A group of prominent United States lawmakers, including Democratic Senators Elizabeth Warren, Bernie Sanders, Bob Casey, and Richard Blumenthal, has called on the Internal Revenue Service (IRS) and the Treasury to take swift action in closing tax loopholes exploited by “crypto tax evaders.”

In a letter sent on August 1, the senators expressed their concern over a staggering “crypto tax gap” estimated at $50 billion. They warned that delaying the implementation of new tax regulations could result in a loss of approximately $1.5 billion in tax revenue for the 2024 financial year.

According to the senators, tax evaders and certain crypto intermediaries have been capitalizing on the current loopholes in the tax system to siphon billions of dollars away from the U.S. government. They stressed the urgency of addressing this issue promptly, urging the IRS and Treasury not to give these entities any further opportunities to exploit the system.

The lawmakers’ call for action stems from the Senate’s $1.2 trillion infrastructure bill, passed in August 2021, which outlined new tax laws with increased reporting requirements for businesses functioning as crypto brokers.

Despite the bill having been signed into law, the Treasury and IRS are yet to release the new tax rules. The agencies have until December 31 to publish and implement the regulations, but the senators are pressing for an earlier rollout.

Elizabeth Warren has been an outspoken critic of the cryptocurrency industry in the U.S. and has made it a focal point of her Senate re-election campaign, forming what some have dubbed an “anti-crypto army.”

On the other hand, Bernie Sanders, while not as vocal about crypto, has supported Warren’s efforts by co-signing letters aimed at imposing stricter regulations on the crypto space.

Interestingly, a recent poll conducted by Grayscale Investments revealed that 59% of Democrats and 51% of Republicans view cryptocurrency as the future of finance. This suggests that while Warren’s stance on crypto might not resonate with the majority of the population, there is growing interest and support for cryptocurrencies across party lines.

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