Cryptocurrency exchange, Coinbase Global Inc. (NASDAQ:COIN), has registered its dissent against a new tax proposal by the U.S. Internal Revenue Service (IRS). The exchange perceives the proposal as a potential threat to the cryptocurrency industry and an infringement on the privacy of U.S. citizens.
The letter, authored by Lawrence Zlatkin, Vice President of Tax for Coinbase, lambasted the proposed rules as an “incomprehensible and unduly burdensome set of new reporting requirements”. Zlatkin argued that these rules would potentially hamper the taxpayer services that the IRS intends to improve.
Before the letter from Coinbase, the IRS had earmarked crypto as a contributor to the “tax gap” issue, where potential tax revenue is being missed. However, the crypto exchange has requested the IRS to amend the proposal, limiting compliance requirements to parties directly involved in digital asset transactions, similar to conventional finance.
On the other hand, Democratic senators, including Senator Elizabeth Warren (D-Mass.), have encouraged the IRS to overlook industry objections and enforce the rules promptly to avert tax revenue loss.
The IRS will be contemplating the public comments received till October 30 before finalizing the rule.
Additionally, the industry leader’s concerns over regulatory decisions come at a time when they are expected to face a challenging Q3, according to an analyst from Oppenheimer.
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