The Chamber of Digital Commerce, a leading blockchain industry trade association, has submitted feedback on the IRS’s proposed Form 1099-DA, intended for reporting digital asset transactions. The chamber's response highlights the need for a simplified form that is easier for brokers handling digital assets to use. They emphasize that the form should only request essential information to safeguard taxpayer privacy and avoid excessive data collection.
The chamber criticized the draft form for requesting unnecessary sensitive information such as transaction IDs and digital asset addresses, which could infringe on privacy. They argued that such details should only be collected under suspicion of criminal activity. Additionally, the chamber suggested the form should allow brokers to indicate if a digital asset is subject to a different tax rate, such as non-fungible tokens (NFTs) treated as collectibles and taxed at a higher rate. This provision would help prevent errors in IRS processing and ensure accurate tax reporting.
This feedback follows the IRS's release of the draft form on April 18, which invited public comments. The proposed Form 1099-DA requires brokers, including kiosk operators, digital asset payment processors, and wallet providers, to report digital asset sales and exchanges for each customer.
The Blockchain Association also expressed concerns, stating that the rule contains fundamental misunderstandings about digital assets and decentralized technology.
Disclaimer: Please note that the information provided in this article is based on the referenced research articles. It is essential to conduct further research and analysis before making any investment decisions. The cryptocurrency market is highly volatile, and investors should exercise caution and consult with financial professionals before engaging in cryptocurrency trading or investment activities.