Oct. 29, 2023
Concern about the potential burden on small businesses due to the new reporting requirements. Request for further analysis and possible exemptions for smaller entities. Request for additional guidance on how the proposed regulations interact with existing federal rules related to tax reporting and withholding. Inquiry into the process for updating and maintaining documentation related to digital asset transactions, particularly in relation to changes in technology and evolving regulatory environments. Concern over the potential impact of these proposed regulations on privacy rights, especially given the increasing use of digital assets for anonymous transactions. Request for further discussion on measures taken to protect individual privacy while ensuring compliance with tax laws. Request for clarification on the treatment of digital assets that do not fit neatly into categories such as currency, security, or commodity. How will these assets be treated for reporting purposes? Concern over the possibility of increased fraud and identity theft resulting from the need to collect and store sensitive personal and financial information related to digital asset transactions. What steps are being taken to mitigate these risks? Request for more detailed information on the estimated time burden and cost implications associated with implementing these proposed regulations, both for the IRS and for affected parties. Inquiry into the potential impact of these proposed regulations on international trade and investment, particularly in relation to foreign digital asset exchanges and platforms. Are there any provisions designed to minimize negative consequences for U.S. businesses operating abroad? Request for further explanation of the presumption rules outlined in the proposal, including how they will be applied in practice and what factors will be considered when determining whether a broker can reasonably associate a payment with valid documentation. Concern over the lack of available data to accurately estimate the number of Forms that will be filed as a result of these proposed regulations. Request for additional research and analysis to inform this estimation. Request for clarification on the role of third-party service providers in assisting digital asset brokers with compliance efforts, including any potential liability issues that may arise. Inquiry into the process for reviewing and updating these proposed regulations as technological advancements continue to shape the landscape of digital asset transactions. Will there be opportunities for stakeholder input throughout this process? Request for more information on the public hearing scheduling process, including details on how requests to speak will be evaluated and selected. Concern over the potential chilling effect these proposed regulations could have on innovation within the digital asset industry. Request for consideration of alternative approaches that balance the need for tax compliance with fostering growth and development in this emerging sector. Request for further detail on the specific types of information that will be collected as part of these proposed regulations, including any plans for sharing this information with other government agencies or private entities. Inquiry into the timeline for implementation of these proposed regulations, including any interim measures that may be put in place to ensure smooth transition and compliance. Request for clarification on the penalties and enforcement mechanisms associated with non-compliance with these proposed regulations, including any provisions for leniency or amnesty programs for early adopters seeking to come into compliance. Concern over the potential impact of these proposed regulations on the competitiveness of the U.S. market vis-à-vis global counterparts, particularly in light of differing regulatory frameworks around the world. Request for further analysis of this issue and consideration of ways to promote consistency and harmonization across jurisdictions. Request for additional guidance on how these proposed regulations will interact with existing anti-money laundering and know-your-customer requirements applicable to digital asset brokers. Will there be any coordination or alignment between these two sets of rules? Inquiry into the process for soliciting feedback from affected parties after the publication of these proposed regulations, including details on how comments will be reviewed and incorporated into any subsequent revisions. Request for clarification on the treatment of digital assets held in custody by brokers on behalf of customers, particularly in cases where the underlying assets may be subject to different reporting requirements depending on their classification. Concern over the potential administrative burdens placed on digital asset brokers, particularly small businesses with limited resources. Request for further analysis of these impacts and exploration of targeted relief options for affected entities. Inquiry into the role of cryptographic techniques, such as zero-knowledge proofs, in facilitating compliance with these proposed regulations while preserving user privacy. Are there any plans to explore the integration of such technologies into the regulatory framework? kyle Hermes-Smith