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IRS Tax Reporting Rules Set for 2027 Spark Concerns Over Decentralized Finance
The Internal Revenue Service (IRS) has recently finalized new tax reporting rules, effective January 1, 2027. The regulations require brokers to report crypto profits and provide customers with Form 1099, including personal data such as names and addresses. This decision has sparked concerns over the impact it may have on decentralized finance (DeFi).
According to John Deaton, a well-known XRP lawyer, these rules unfairly target DeFi platforms. He argues that permissionless smart contracts cannot comply with these requirements as they operate independently without central control or intermediaries.
The new rule aims to align DeFi brokers with the reporting standards of traditional securities brokers. However, critics claim that this distinction creates significant operational challenges for entities facilitating DeFi interactions.
Source: cryptonewsland.com
