By Benjamin Guggenheim
daily management
Wait, how much? The IRS expects so much cryptocurrency revenue — $8 billion, to be exact — that agency officials expect to double down when they hear the actual numbers.
"Don't fall out of your chair," Julie Forster, the IRS's director of digital assets, told conference attendees last week before dropping that number, via Tax Note's Jonathan Curry.
It's a hard number to put into context: Foerster also said the agency expects to return twice as much information about virtual currency transactions as other 1099 forms combined, a number he said could be too high for the IRS system.
Seth Wilkes, vice president of government relations at crypto-accounting firm TaxBit, told Tax Weekly that he could see the number of 1099-DA forms rising rapidly for, say, any virtual currency used for a benefit or service. will encourage new disclosures
We'll talk more about that in a moment, but first, please join us for a special edition of Devil's Night Weekly Tax, where we ask what kind of medals will be handed out at the Florida Man Games.
Uniting Continents: Today marks half a century since the opening of Istanbul's Bosphorus Bridge, which connected Europe to Asia and was, at the time of completion, the longest suspension bridge outside the United States.
Email: [email protected] , [email protected] , [email protected] and [email protected] .
You can also join us on Twitter: @berniebecker3, @tobyeckert, @brian_faler, @ben_guggenheim, @POLITICOPro and @Morning_Tax.
Would you like to receive this newsletter every day of the week? Sign up for POLITICO Pro . You'll get daily political news and other information you need to take action on the biggest stories of the day.
Back to crypto : Let's try to put everything in context: John Buhl of the Urban-Brookings Tax Policy Center says that about 40 million adults in the United States transact in virtual currency, which means the IRS expects to refund 200 per user.
That's why Buhl said he was surprised that the IRS expected many 1099-DA forms, with a new return designed specifically for crypto, when the new reporting requirements take effect in 2026.
But the $8 billion number may help explain why the IRS is moving more deliberately to enforce crypto reporting requirements, which became law as part of the Bipartisan Infrastructure Act of 2021, he added, and could increase pressure on industry to slow down its appearance. . For more.
Still, Wilks said he's confident the IRS's systems will be ready to handle billions in new information returns if needed.
But if it's not 8 billion, are there too many cryptocurrency-related profits to overwhelm the IRS? Wilkes declined to put a number on that, but said the IRS must continue to work with the private sector to keep up with emerging technologies.
Here's a look for you: Let's face it: IRS commissioners took tougher questions from a GOP-led House Oversight Committee than Danny Werfel did last week.
And it includes Warfel himself, who faced the wrath of the same panel a decade ago as IRS chief at the height of the agency's Tea Party controversy.
That doesn't mean House Republicans will go easy on the IRS, as Democrats prioritized cutting $80 billion in additional funding for the agency in the 2022 tax and climate change bill.
Here's the latest example: The House Judiciary Committee and the House Select Committee on Federal Armaments released a new report on the IRS on Friday, in which the panels took credit for the agency's announcement this year that it would not conduct inspections unannounced in the field. . on taxpayers.
The announcement was criticized by the IRS, including when it visited reporter Matt Taibbi's home the same day he testified before the operations subcommittee.
For his part, Warfel described the change in inspection policy as a way to protect employees and taxpayers — the latter from fraudsters and the former from the risks and dangers that can come from visiting a home or business.
In the report, House Republicans also outlined other areas where they could pressure the IRS. Last week, for example, Warfel received questions about a case in which the IRS had to pay penalties to an escrow agency because agency employees falsified dates on documents.
Republican lawmakers "already know that the IRS intentionally and repeatedly imposes excessive penalties on taxpayers by delaying their tax filings and attempting to legally take advantage of available tax breaks," the report said.
Some year-end anecdotes: The outlook for the year-end tax bill remains bleak. But with 2023 just two months away, advocacy groups seeking to push the tax package across the finish line are ramping up their work.
For example, the Business Roundtable, an advocacy group of business leaders, welcomes other trade associations and businesses to coordinate their lobbying efforts on a tax bill later in the year, according to a source close to the meeting.
Business groups are particularly concerned about the rollback of three tax increases in the 2017 GOP tax bill, which affect deductions for research and interest expenses, as well as investment limits. A year-end tax package could provide some relief from this tax increase through the extension of the child tax credit.
The Business Bureau is also moving forward with a six-figure advocacy campaign, including digital and radio ads, arguing that these three tax increases put American businesses at a competitive disadvantage.
side of the world
Bloomberg: "Kishida's support in Japan will fade even as he promises tax cuts."
Reuters: "Italy will increase the tax for owners of some short-term rental apartments".
Also Reuters: “Canada to suspend carbon tax on home heating oil for three years. »
nationwide
Nebraska Examiner: "State property tax administrator steps down from key position."
Oregon Public Broadcasting: "Metro Portland homelessness tax could bring in nearly $1 billion in revenue by 2029."
Montana Public Radio: "Montana districts sue state over property tax."
It's worth your time too
From Politico: "Federal prosecutor to Congress: I did not interfere in Hunter Biden investigation."
Pro Tax: “Brainard White House calls for higher taxes on rich to cut deficit. »
E&E News: "Senate Republicans seek cover for carbon price hike." »
you know
The longest suspension bridge in the world is in Turkey: Canakkale Bridge from 1915, which opened in 2022.