The United States Internal Revenue Service (IRS), the agency responsible for tax collection, released proposed regulations on the sale and exchange of digital assets by brokers. Under the rules, brokers would be required to use a new form to report to simplify tax filing and cut down on tax cheating.
The proposed Form 1099-DA would “help taxpayers determine if they owe taxes, and […] avoid having to make complicated calculations or pay digital asset tax preparation services in order to file their tax returns,” according to a Treasury Department statement. It added:
“Under current law, taxpayers owe tax on gains and may be entitled to deduct losses on digital assets when sold, but for many taxpayers it is difficult and costly to calculate their gains.”
The regulations bring digital asset reporting into line with reporting on other types of assets, the Treasury said.
The draft proposal, set to run in the Federal Register on Aug. 29, is 282 pages long. It is part of the Biden administration’s implementation of the bipartisan Infrastructure Investment and Jobs Act (IIJA), the Treasury said. IIJA provisions are expected to raise $28 billion in new tax revenue over ten years.
The proposed rules would go into effect in 2026 to reflect sales and exchanges carried out in 2025. Written comments on the proposal are being accepted through Oct. 30. At least one public hearing will be held after that date.
Judging from the initial reaction to the proposal, the IRS may have a lot of comments to field. Kristin Smith, CEO of the Blockchain Association, an industry advocacy group, released a statement that said:
“It’s important to remember that the crypto ecosystem is very different from that of traditional assets, so the rules must be tailored accordingly and not capture ecosystem participants that don’t have a pathway to compliance.”
Smith added that the group and its members were looking forward to providing comment.
Reuters quoted DeFi Education Fund CEO Miller Whitehouse-Levine as saying, “Today’s proposal from the IRS is confusing, self-refuting, and misguided. It attempts to apply regulatory frameworks predicated on the existence of intermediaries where they don’t exist.”
Treasury & IRS released proposed regulations on the sale and exchange of digital assets by brokers:https://t.co/u6TewiS7tV
Patrick McHenry, chairman of the House of Representatives Financial Services Committee, called the proposal “another front in the Biden Administration’s ongoing attack on the digital asset ecosystem.”
McHenry also called the proposed rules “misguided,” and said, “Following the passage of the Infrastructure Investment and Jobs Act, numerous lawmakers of both parties made clear that any proposed rule must be narrow, tailored, and clear.”
Draft of IRS proposed digital asset broker reporting rules. Source: The Federal Register
McHenry added that he was glad that exemptions in the proposal reflected those in the Keep Innovation in America bill, which he co-wrote with Rep. Ritchie Torres. McHenry said the bill is intended to “fix the poorly constructed digital asset reporting provisions” in the IIJA.
Advocacy group Coin Center weighed in on digital asset taxation a few days earlier in a letter to Sens. Ron Wyden and Mike Crapo. The letter contained suggestions very specifically tailored to digital assets and raised privacy concerns.
The Chinese owner of British Steel has held fresh talks with government officials in a bid to break the impasse over ministers’ determination not to compensate it for seizing control of the company.
Sky News has learnt that executives from Jingye Group met senior civil servants from the Department for Business and Trade (DBT) late last week to discuss ways to resolve the standoff.
Whitehall sources said the talks had been cordial, but that no meaningful progress had been made towards a resolution.
Jingye wants the government to agree to pay it hundreds of millions of pounds for taking control of British Steel in April – a move triggered by the Chinese group’s preparations for the permanent closure of its blast furnaces in Scunthorpe.
Such a move would have cost thousands of jobs and ended Britain’s centuries-old ability to produce virgin steel.
Jingye had been in talks for months to seek £1bn in state aid to facilitate the Scunthorpe plant’s transition to greener steelmaking, but was offered just half that sum by ministers.
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British Steel has not yet been formally nationalised, although that remains a probable outcome.
Jonathan Reynolds, the business secretary, has previously dismissed the idea of compensating Jingye, saying British Steel’s equity was essentially worthless.
Last month, he met his Chinese counterpart, where the issue of British Steel was discussed between the two governments in person for the first time.
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Inside the UK’s last blast furnaces
Jingye has hired the leading City law firm Linklaters to explore the recovery of hundreds of millions of pounds it invested in the Scunthorpe-based company before the government seized control of it.
News of last week’s meeting comes as British steelmakers face an anxious wait to learn whether their exports to the US face swingeing tariffs as part of US President Donald Trump’s trade war.
Sky News’s economics and data editor, Ed Conway, revealed this week that the UK would miss a White House-imposed deadline to agree a trade deal on steel and aluminium this week.
Jingye declined to comment, while a spokesman for the Department for Business and Trade said: “We acted quickly to ensure the continued operations of the blast furnaces but recognise that securing British Steel’s long-term future requires private sector investment.
“We have not nationalised British Steel and are working closely with Jingye on options for the future, and we will continue work on determining the best long-term sustainable future for the site.”