Oct. 15, 2023
Dear IRS and Treasury Department, I am writing to express my concerns regarding the proposed regulations outlined in the PDF document titled "Gross Proceeds and Basis Reporting by Brokers and Determination of Amount Realized and Basis for Digital Asset Transactions." While I understand the importance of information reporting and the determination of amount realized and basis for digital asset sales and exchanges, there are several key points that I find problematic. Firstly, I am concerned about the privacy and safety implications of allowing numerous third parties to have access to my sensitive financial data and social security number. The requirement for brokers, including digital asset trading platforms, digital asset payment processors, and certain digital asset hosted wallets, to file information returns and furnish payee statements raises significant privacy concerns. It is crucial to ensure that adequate safeguards are in place to protect this sensitive information from unauthorized access and misuse. Additionally, I find the proposed regulations to be confusing, as they create reporting requirements for a wide range of participants in decentralized finance (DeFi). This approach is likely to result in multiple, inconsistent reports being generated for the same transaction, leading to confusion and potential compliance issues. It would be more efficient and effective to have clear guidelines and a streamlined reporting process that minimizes duplication and avoids unnecessary complexities. Furthermore, I believe that the proposed regulations suffer from poorly defined terms. For example, the use of the term "platform" without a clear definition leaves room for multiple interpretations, potentially resulting in inconsistent application of the regulations. Similarly, the definitions provided for terms such as "wallet," "smart contracts," and "validator" do not accurately reflect their technical meanings, leading to confusion and potential misinterpretation. It is essential to develop clear and precise definitions to ensure clarity and consistency in the implementation of these regulations. In conclusion, I urge you to address these concerns and undertake a thorough review of the proposed regulations. Privacy and security considerations must be prioritized, and efforts should be made to streamline reporting requirements and provide clear definitions of key terms. By doing so, we can create a regulatory framework that promotes compliance, innovation, and the efficient functioning of digital asset markets. Thank you for considering my comments. Sincerely, Morgan Meigs