In a move that could impact the intersection of cryptocurrency and government finance, U.S. Representative Matt Gaetz has introduced a bill that would allow Americans to pay their federal income taxes using Bitcoin.
The proposed legislation, introduced in the House of Representatives, aims to amend the Internal Revenue Code of 1986 to accommodate this new payment method.
The bill, if passed, would require the Secretary of the Treasury to develop and implement a system for accepting Bitcoin as payment for individual federal taxes.
Decrypt reached out to Gaetz for comment but did not receive an immediate response.
This system would need to address several key aspects, including specifying when Bitcoin payments are considered received and requiring the immediate conversion of Bitcoin to its dollar equivalent upon transaction completion.
Rep. Gaetz’s proposal also includes provisions for the Internal Revenue Service (IRS) to enter into contracts for services related to receiving Bitcoin payments. The bill stipulates that rules similar to those governing credit card payments would apply to fees associated with these services.
Importantly, the legislation addresses issues of liability and confidentiality, applying rules similar to those currently in place for other payment methods. This approach aims to ensure that the introduction of Bitcoin as a payment option does not compromise existing taxpayer protections.
In a press release, Rep. Gaetz said that the move was designed to encourage innovation and efficiency while giving American taxpayers more ways to meet their obligations.
“This is a bold step toward a future where digital currencies play a vital role in our financial system, ensuring that the U.S. remains at the forefront of technological advancement,” he said.
The timing of this bill is noteworthy, coming on the heels of Rep. Gaetz’s recent trip to El Salvador for the second inauguration of President Nayib Bukele. El Salvador made history in 2021 by becoming the first nation to adopt Bitcoin as legal tender—a move that has since sparked global discussions about cryptocurrency‘s role in national economies.
This legislative proposal aligns with a growing interest in cryptocurrency within certain political circles. Former President Donald Trump, of whom Republican Representative Gaetz is a known ally, recently began accepting crypto donations for his campaign.
At a recent rally, Trump declared his intention to “end President Joe Biden’s war on crypto,” and ensure that “the future of crypto and the future of Bitcoin will be made in America.”
While Democrats have historically been less friendly to cryptocurrency, President Biden is reportedly easing on the topic as it becomes an emerging wedge issue in an election year. Biden officials will reportedly attend a Bitcoin roundtable discussion in Washington DC, and the administration has also rehired a crypto advisor who has been critical of the Securities and Exchange Commission (SEC).
The introduction of this bill represents a potentially significant step in the mainstream adoption of cryptocurrency in the United States.
If passed, it would mark a major shift in how the federal government interacts with digital currencies, potentially paving the way for broader acceptance and integration of Bitcoin and other cryptocurrencies in official financial transactions.
Edited by Andrew Hayward
Daily Debrief Newsletter
Start every day with the top news stories right now, plus original features, a podcast, videos and more.
Source: https://decrypt.co/236945/rep-matt-gaetz-bill-federal-tax-payments-bitcoin
