IRS extends crypto tax rule comment period after “strong public interest” 

The Treasury and Internal Revenue Service pushed the deadline to submit comments on their proposed crypto regulations by two weeks


Mehaniq/Shutterstock modified by Blockworks


The Treasury has opted to extend the comment period for its proposed new rules on crypto reporting requirements by two weeks. Interested parties now have until mid-November to share their thoughts with the tax regulator. 

The Treasury and Internal Revenue Service pushed back the comment deadline in response to the “strong public interest” the rule has received since first proposed in August, according to a Federal Register document scheduled to be published on Oct. 25. 

The proposed rule, published in late August 2023, suggests defining digital asset “brokers” as “trading platforms, digital asset payment processors, certain digital asset hosted wallet providers and persons who regularly offer to redeem digital assets that were created or issued by that person.” 

Notably, and to the delight of many industry members, the agencies exempt individual miners and validators from the “broker” classification. Still, the rules, if passed, would put added responsibilities on crypto companies many industry players find troubling

“The proposed regulations, as written, would impose an incomprehensible and unduly burdensome set of new reporting requirements,” Lawrence Zlatkin, Coinbase’s vice president of tax, wrote in a comment letter earlier this month. 

Zlatkin added that under the new rules, the IRS would be “bombarded with data,” including trivial transactions with “zero or negligible taxable income.”

Under the proposed rules, crypto brokers will have to adhere to the same rules as securities brokers, including filing information returns and furnishing payee statements for all customers and traders. 

The Treasury is also calling for brokers to provide a new Form 1099-DA, a special form for reporting non-employment income from digital assets, to all customers and clients, in an effort to help taxpayers manage their tax obligations. 

Carlo D’Angelo, a crypto criminal defense attorney, highlighted that the requirements exert significant pressure on businesses. He said that investors and clients should be advised that these regulations will impact their data.

“As currently drafted, these proposed regulations require consumers to disclose sensitive personal identifying information to any qualifying digital asset broker in order to effectuate a digital asset transaction,” D’Angelo wrote in his comment letter. “These digital asset brokers — who fall outside the scope of traditionally regulated securities brokers — would then be required to collect, store, and pass on that KYC (know your customer) information to the IRS in the form of a special 1099-DA reporting form.” 

The Treasury and IRS were mandated in 2021 to draft the crypto regulations as part of President Biden’s Infrastructure Investment and Jobs Act. 

The public hearing on Nov. 7 will proceed as scheduled, the agency said, and a second hearing will take place on Nov. 8 if there is enough demand. Requests to speak at the hearing must be submitted via email by Oct. 30, the agency said.

Don’t miss the next big story – join our free daily newsletter.


Upcoming Events

Hilton Metropole | 225 Edgware Rd, London

Mon - Wed, March 18 - 20, 2024

Crypto’s premier institutional conference returns to London in March 2024. The DAS: London Experience: Attend expert-led panel discussions and fireside chats Hear the latest developments regarding the crypto and digital asset regulatory environment directly from policymakers and experts.

Salt Lake City, UT

WED - FRI, OCTOBER 9 - 11, 2024

Pack your bags, anon — we’re heading west! Join us in the beautiful Salt Lake City for the third installment of Permissionless. Come for the alpha, stay for the fresh air. Permissionless III promises unforgettable panels, killer networking opportunities, and mountains […]

recent research

Research report - cover graphics (1).jpg


In this report, we dive into crypto private market data to gather insights on where the future of the industry is headed. Despite a notable downturn in private raises, capital continues to infuse promising projects that aim to transform payments, banking, consumer experiences, community, and more, with 2023 being the fourth-largest year for crypto venture capital.


BUZZ holds shares of Coinbase, Robinhood and MicroStrategy


Opinion: Even though I didn’t pay for my “Diamond Hands” burger with BTC, don’t let that fool you into thinking that crypto’s development is futile


The results mark “a major positive inflection point,” one analyst says, as the exchange carries net income momentum into a crypto rally


While the slate of 10 US spot bitcoin funds have tallied $4.6 billion of net inflows thus far, half of the field is lagging the leaders


Trading volumes totalled $154 billion in Q4, including $125 billion in institutional volume


DeFi on Bitcoin is all the rage right now and Stacks is positioned to benefit