US Lawmakers Press IRS to Implement Crypto Tax Reporting Requirements Before 2026

A group of seven U.S. Senators, including prominent figures like Elizabeth Warren and Bernie Sanders, have urged the Treasury Department and the Internal Revenue Service (IRS) to expedite the implementation of tax reporting regulations for cryptocurrency brokers. In a joint letter addressed to Treasury Secretary Janet Yellen and IRS Commissioner Daniel Werfel, the senators expressed their concerns over the two-year delay in enforcing these regulations, which are set to be applicable from 2026 for transactions occurring in 2025. The lawmakers argued that this delay might lead to a loss of approximately $50 billion in annual tax revenue and allow dishonest actors to evade tax payments.

The senators applauded the proposed regulations but voiced deep reservations about the extended timeline for their implementation. They emphasized that postponing the enforcement of these rules until 2026 could offer undue opportunities to crypto lobbyists to undermine the Administration’s attempts to establish essential reporting standards in the largely unregulated crypto industry. The senators emphasized the urgency of the situation, stressing the need to act promptly.

Senator Warren took to social media platform X (formerly Twitter) to highlight the role of cryptocurrency as a financial tool funding controversial entities like Hamas amid their conflicts with Israel. This statement came after crypto exchange Binance froze accounts associated with Hamas following requests from Israeli law enforcement.

The IRS had introduced the crypto reporting requirements in August, and public input on the proposal was open until October 30. The regulations required brokers to assist taxpayers in determining their tax obligations related to cryptocurrency and furnish details on digital asset transactions. Representative Patrick McHenry, currently serving as interim House Speaker, criticized the regulations, viewing them as a detrimental move against the digital asset ecosystem.

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