The U.S. Internal Revenue Service continues to propose new tax reform proposals to regulate U.S. crypto investment. The latest notice is to share the tax obligations of the cannabis industry.
The notice, signed by IRS Small Business/Self-Employed Division Commissioner De Lon Harris, reflects the priorities of U.S. federal agencies to ensure that local businesses that grow, distribute, and sell cannabis comply with cryptocurrency taxes.
Commissioner Harris Said The use of cryptocurrency in the cannabis industry is one of the IRS’s primary enforcement priorities.This statement coincides with a recent proposal made by Senate lawmakers from July 2021, which aims to Tighten taxation and reporting rules for businesses Handling cryptocurrency. According to Harris:
“Those who use it [cryptocurrencies] It needs to be understood that the IRS treats it as property and has taxable income. “
In addition, the Director of the Internal Revenue Service recommends that cannabis companies cooperate with reputable exchanges to convert cryptocurrencies into U.S. dollars.
The IRS has not yet required companies to explicitly report high-value crypto transactions.However, the company will need to submit Form 8300 For each transaction over 10,000 USD.
The Senate’s bipartisan infrastructure agreement recently saw a last-minute amendment, proposing to raise $28 billion worth of funds through a tax on crypto investments and transactions.
Immediately thereafter, on the most recent September 13, House Democrats proposed new tax measures to increase the tax rate on long-term capital gains. If approved, the law will increase the crypto tax on “certain high-income individuals” by 5%.
According to the Cointelegraph report, the bill also proposes a 3.8% additional tax on net investment income, raising the tax rate for specific investors to 28.8%.
In addition, the new tax plan will implement wash-sell rules for cryptocurrencies and other digital assets, which will prevent investors from claiming capital gains deductions. Currently, U.S. lawmakers suspect that cryptocurrency investors use shuffling to manipulate the capital gains of their investment portfolios.