In October, the Treasury Department signaled it intends to release a proposed rule this year to recalibrate legislation set to take effect on Jan. 1, 2023 that would greatly increase the number of people considered brokers for tax reporting purposes.
This expanded definition could add onerous tracking requirements to a wide swath of the digital asset sector, potentially including those that help nonprofits accept crypto donations. While lawmakers have floated legislative fixes, none have advanced far enough to solve the problem.
Overly broad rules and intrusive surveillance could turn people away from this emerging asset, make it more difficult for companies to help nonprofits process digital asset donations and complicate the issue for donors wishing to remain anonymous, all of which could hurt giving.
To further understand why it’s important that Congress and Treasury Department officials address these unintended consequences, see New Crypto Broker Rules Could Inadvertently Impact Charitable Giving.