US Congress Asking to Ease on Crypto Taxes

US Congress Asking to Ease on Crypto Taxes 1024 500 Crypto Rand Group
crypto Taxes

The United States authorities continue to be very cautious in their dealings with crypto taxes. Although some policies call for more flexibility, the SEC, for its part, wants to keep an eye on everything first.

Relaxing fees for staking crypto

Members of the U.S. Congress sent a letter on July 29 to the highest representatives of the Internal Revenue Service (IRS), the U.S. tax authority.

In this letter, Congressmen David Schweikert, Bill Foster, Tom Emmer and Darren Soto urge the tax authorities to better understand the workings of crypto staking, as the current taxation on its earnings seems to them not only inappropriate but also risks limiting the use of this technology in the United States.

It should be remembered that staking (token staking) is the fundamental pillar of the operation of Proof of Stake (PoS) networks. In exchange for ensuring the operation and security of the network, by putting their token into play, users receive an incentive in the form of a staking reward.

Taxing taxpayers for each staking reward collected in tokens (which is theoretically the case in the United States at present) would be counterproductive according to legislators:

“It is possible that taxing staking rewards as income may overestimate the actual earnings of taxpayers who participate in this new technology…. It could also lead to a tax reporting and compliance nightmare for both taxpayers and the [tax] department.”

To avoid administrative headaches, the members of Congress therefore formally recommend that the IRS quickly consider a better taxation system, where tokens earned by staking would only be taxed when sold in hard currency.

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The SEC does not want to lose a crumb of what is happening on blockchains

Almost at the same time, the Securities and Exchange Commission (SEC) issued a request for proposals on July 30 to procure tools for monitoring smart contracts based on distributed registry technology (DLT).

This tool should enable the SEC to monitor not only the source code of smart contracts, but also all related data. This includes retrieving white- or blacklisted addresses on these contracts. This serves to ensure that the former (legitimate) do not evade taxes and to launch enforcement actions against the latter, since they are likely to be linked to illegal activities.

In addition, it should be noted that the SEC recently signed a partnership with CipherTrace to closely scrutinize the blockchain activities of the Binance platform.

Even if some American legislators are calling for a little common sense in the relationship of government organizations with cryptomoney, these authorities are obviously more concerned about controlling everything before deciding anything. Tax cuts will have to wait, once again.

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