U.S. Senators Elizabeth Warren, Bernie Sanders, Bob Casey, and Richard Blumenthal have sent a letter to the Internal Revenue Service (IRS) and the Treasury, urging them to take swift action in closing tax loopholes that are being exploited by “crypto tax evaders.”
The lawmakers emphasized that failure to act promptly could result in a “crypto tax gap” of $50 billion, leading to a potential loss of $1.5 billion in tax revenue for the 2024 financial year if tax policy updates are delayed.
The senators’ concerns stem from the tax laws outlined in the Senate’s $1.2 trillion infrastructure bill, which was passed in August 2021.
The bill aimed to increase tax reporting requirements for businesses operating as crypto brokers. Despite the bill being signed into law, the Treasury and IRS have yet to release their new tax rules.
The deadline for their implementation is December 31, and the senators are calling for an expedited process.
Elizabeth Warren has been a vocal critic of the cryptocurrency industry in the United States and even made it a central focus of her Senate re-election campaign, forming an “anti-crypto army.”
Bernie Sanders, though less vocal about crypto, has co-signed letters with Warren seeking tighter restrictions on the space.
READ MORE: IRS Issues New Ruling: U.S. Crypto Investors Must Report Staking Rewards as Gross Income
A recent poll commissioned by Grayscale Investments revealed that 59% of Democrats and 51% of Republicans view cryptocurrencies as the future of finance, suggesting that Warren’s anti-crypto stance might not resonate with the majority of the population.
The senators’ letter serves as a reminder of the growing concern among lawmakers about potential tax evasion facilitated by cryptocurrencies.
They stress the importance of implementing robust regulations promptly to prevent tax evaders and intermediaries from exploiting the system and diverting billions of dollars annually from the U.S. government.
With the clock ticking and the deadline approaching, the lawmakers are pushing for the IRS and Treasury to take action immediately to address the crypto tax gap and ensure a fair and transparent tax system for all citizens.
Whether the agencies will act promptly in response to the senators’ letter remains to be seen, but the call for regulatory clarity in the crypto space continues to gain momentum.
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