Cryptocurrency exchange, Coinbase Global Inc. (NASDAQ:COIN), has registered its dissent against a new tax proposal by the U.S. Internal Revenue Service (IRS). The exchange perceives the proposal as a potential threat to the cryptocurrency industry and an infringement on the privacy of U.S. citizens.
What Happened: Coinbase’s response to the IRS’s proposal that seeks to define crypto brokers and guide them, along with their clients, on tax compliance, reported CoinDesk. In a letter addressed to the IRS on Thursday, Coinbase expressed its anxiety over the proposal, which it claims could lead to “an unprecedented, unchecked, and unlimited tracking on the daily lives of Americans.”
The letter, authored by Lawrence Zlatkin, Vice President of Tax for Coinbase, lambasted the proposed rules as an “incomprehensible and unduly burdensome set of new reporting requirements”. Zlatkin argued that these rules would potentially hamper the taxpayer services that the IRS intends to improve.
Before the letter from Coinbase, the IRS had earmarked crypto as a contributor to the “tax gap” issue, where potential tax revenue is being missed. ...