MetaLawMan, a pro-crypto attorney, has raised concerns about what he describes as “hyper-surveillance” of U.S. taxpayers with crypto obligations under the new tax filing system. The issue revolves around a specific question on IRS Form 1040, which asks whether the taxpayer received digital assets as payment or engaged in any transactions involving digital assets during 2024. This question, according to MetaLawMan, marks an unfair discrepancy compared to other forms of investment, such as gold, stocks, or real estate, which are not subject to similar inquiries.
MetaLawMan argues that this represents a targeted surveillance of the cryptocurrency sector and calls for changes to ensure fairness. He flagged the issue to David Sacks, the Crypto & AI Czar, urging action amid broader demands for reform within the crypto ecosystem.
Controversial IRS Measures
The concerns about surveillance stem from recent developments regarding the IRS’s handling of decentralized finance (DeFi) platforms and crypto transactions. In December, the IRS introduced new regulations requiring crypto exchanges and DeFi platforms to report user transactions to the agency. This move has sparked significant backlash, especially from the DeFi community, with the DeFi Education Fund filing a lawsuit against the IRS, supported by many industry figures.
Additionally, the IRS has faced criticism for its decision to tax crypto staking proceeds, a move that has further fueled controversy surrounding its regulatory approach to the digital asset space.
Focus on U.S. Treasury Reforms Under Trump Administration
As scrutiny grows over these regulatory measures, attention is now turning to the U.S. Treasury Department and potential reforms under the incoming Trump administration. Scott Bessent, Trump’s nominee to lead the Treasury, is known to be pro-crypto, and there are expectations that he may bring clarity to crypto tax regulations, including potentially repealing controversial accounting rules like SAB-121.
However, the landscape remains uncertain, as anti-crypto Senator Elizabeth Warren has urged Bessent to adopt stricter measures. It remains to be seen whether Bessent will align with crypto advocates or follow a more restrictive path.
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