In a creative twist, the blockchain development company Consensys has written to the United States Internal Revenue Service (IRS), requesting a postponement of the impending tax regulation that would require brokers and exchanges to report specific types of cryptocurrency.

Bill Hughes, a lawyer at Consensys, expressed the firm's overarching concern in a recent post, stating that certain aspects of the regulations and the draft Form 1099-DA do not adequately consider the burden on entities that traditionally have had no reporting obligations.

The IRS has been working to treat cryptocurrency brokers similarly to traditional financial brokers for tax reporting purposes, including the introduction of Form 1099-DA for certain cryptocurrency transactions. The draft form lists brokers as digital asset payment processors, hosted and unhosted wallet providers, kiosk operators, and others.

Consensys argues that the draft form presents an insurmountable challenge, as it has not been published with instructions for brokers, making it unclear how to report in several boxes of the form. The firm also raised concerns about the potential harm to U.S. companies specializing in blockchain user interfaces and self-custody wallets, as well as data privacy issues and the limited time brokers have to comply with the new requirements before upcoming tax filing deadlines.

Bill Hughes emphasized the need for a delay in the effective date of any reporting requirements that would pertain to a software developer like Consensys, as well as the need for a multiple broker rule.