Oct. 15, 2023
Dear Internal Revenue Service and Treasury Department, I am writing to provide feedback on the proposed regulations regarding information reporting and the determination of amount realized and basis for certain digital asset sales and exchanges. While I understand the importance of effectively regulating digital assets, I have several concerns regarding the current proposal that I would like to address. First and foremost, I am concerned about privacy and the safety of my sensitive financial data and social security number. As the proposed regulations would require brokers, including digital asset trading platforms and payment processors, to file information returns and furnish payee statements on dispositions of digital assets, there is a risk of my personal information being exposed to multiple third parties. I strongly believe that measures should be put in place to ensure the privacy and security of individuals' financial data. Furthermore, I find the proposed regulations to be confusing, particularly with regards to the reporting requirements for different participants in decentralized finance (DeFi). The current proposal would create multiple and inconsistent reports for the same transaction, which could lead to further confusion and difficulties in compliance. Simplifying the reporting requirements and ensuring consistency across all participants would be beneficial in streamlining the reporting process. De-fi could be considered as data exchange platform. I also have reservations about the timeline for implementing these regulations. It seems that the proposed regs are coming into effect before companies and protocols are able to adequately adjust and accommodate them. This rushed timeline may result in difficulties for businesses and individuals to comply with the regulations, potentially leading to unintentional violations. I encourage the consideration of a more flexible timeline to allow for proper implementation and adaptation. Lastly, I have concerns about the terminology used in the proposed regulations. Many terms, such as platform, are left undefined and open to interpretation, which could lead to confusion and inconsistency in understanding and compliance. Additionally, the definitions of terms like wallet, smart contracts, and validator do not accurately reflect their technical meanings, further contributing to potential misunderstandings. Clear and precise definitions are essential in ensuring the proper understanding and application of the regulations. In conclusion, I appreciate the efforts made by the Internal Revenue Service and Treasury Department in proposing regulations for digital asset transactions. However, I would like to emphasize the importance of addressing these concerns regarding privacy, confusion, timeline, and terminology. Taking these points into consideration will contribute to the development of clear, practical, and effective regulations that promote compliance while ensuring the privacy and security of individuals' financial information. Thank you for your attention to these matters. Sincerely, Rager Sent with Proton Mail secure email.