THEREIN LIES THE ISSUE: That explanation from Treasury helps to illustrate why some industry observers are expecting a delay. Those observers believe it's likely that the Biden administration will deliver those proposed rules by the end of the year. But asking crypto brokers to start reporting and tracking before final regulations? That would be a big thing to ask, they say, largely because companies would have to update their systems based on information that could then change in the future. Treasury and the IRS are also working on a new tax form to deal with crypto transactions, the 1099-DA (for digital asset). Another question to ponder here: Why has this taken so long? "I'm surprised," said Lisa Zarlenga, a partner at Steptoe & Johnson. "I keep asking about them, and keep hearing that they're far along." It's not just that the infrastructure law passed almost a year ago, and there still hasn't been any further guidance on the reporting requirements. In fact, crypto observers have several more reasons why they're puzzled that the Biden administration hasn't gotten at least proposed regulations out the door. For starters, Treasury and the IRS had already been working on virtual currency issues before the infrastructure law passed, so experts thought they might be able to get proposed rules out quite quickly — like within weeks, hopefully giving the regulatory process enough space that companies would be able to update their systems in time for January 2023. Treasury and the IRS had been working on crypto matters in no small part because officials there believe that tax avoidance from virtual currencies increasingly was becoming a major driver of the tax gap — the difference between what the government is owed in taxes and what it collects. "This is probably the number one thing that would increase compliance," Zarlenga said. And Zarlenga offered one more reason to be surprised that it's taken so long for Treasury and the IRS to produce initial guidance, though this one might be a bit more in hindsight. There's no doubt that Treasury and the IRS have had to issue a lot of tax rules in recent years. But the pace of those regulations had slowed down a bit going into this year — until the last couple of months, with the administration now rushing to get out guidance on the new corporate minimum tax and other parts of the Inflation Reduction Act. "For so long, they were in the middle of trying to implement TCJA," Zarlenga said, referring to the GOP's Tax Cuts and Jobs Act from 2017. "Now, we have the IRA. There was kind of a lull." YES, NEXT YEAR COULD GET HAIRY: Republicans remain favored to at least win the House next month, and the GOP could easily gain full control of Congress for next year. And should that happen, conservatives are ready to go to the mat with Democrats to battle for fiscal changes — including possibly new limits on Medicare and Social Security, and making permanent the individual tax cuts from the TCJA, as Pro Budget's Caitlin Emma reported. That sets up potentially another drag-down fight over raising the debt limit, which is also what happened the last time that Republicans took back the House when a Democrat was president. It doesn't seem likely that Washington will make a decision on those individual tax cuts during the next Congress, given that they don't expire until the end of 2025 — after the next presidential election. But there could easily be plenty of jockeying over those tax cuts. The Republican Study Committee released a budget plan this year that would make the 2017 tax cuts permanent, as well as raising the eligibility age for Medicare and Social Security. Meantime, Democrats have for years railed against the TCJA as a giveaway for the rich, which underscores that the 2017 tax relief for the bottom 98 percent or so of earners is probably safe. For instance, Speaker Nancy Pelosi took aim at the GOP tax cuts during a Sunday interview with CBS' "Face the Nation," calling it a "$2 trillion tax cut for the high end" and arguing that Democrats' policies these last two years were less inflationary than the TCJA. ICYMI: It was a big Friday at Pro Tax. Contribution limits for retirement accounts will be going up next year because of inflation, from Pro Tax's Brian Faler. The deficit dropped by a record amount in fiscal 2022 , as Morning Money's Kate Davidson reported — because of a rise in revenues and the end of temporary pandemic relief. Also from Kate: " The dark cloud hovering over Biden's government finances ." And a federal appeals court hit the pause button on Biden's initiative to relieve student loan debt, via Pro Education's Michael Stratford.
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