US Representative Matt Gaetz, a Republican from Florida, has put forth a bill that would allow Americans to pay their federal income tax using Bitcoin. If the bill is passed, the US Secretary of the Treasury would establish a program to enable tax payments with Bitcoin.
Representative Gaetz was inspired to propose this legislation after attending the inauguration of El Salvador president Nayib Bukele. In 2021, El Salvador became the first country to accept Bitcoin as a legal currency. Gaetz believes that his bill would modernize the current tax system and ensure that the US remains at the forefront of technological progress.
The proposed legislation would amend the Internal Revenue Code of 1986 to accommodate Bitcoin as a payment method for taxes. Gaetz’s proposal aligns with former President Donald Trump’s promise to support the development of crypto and Bitcoin in the United States.
The bill also calls for regulations to be put in place to facilitate Bitcoin payments. These regulations would include converting Bitcoin payments into dollars upon receipt and implementing fees that are consistent with those for credit card payments. The bill also aims to ensure that tax disputes are resolved by the Secretary of the Treasury without the involvement of financial intermediaries.
The Internal Revenue Service (IRS) has already required taxpayers to report income from crypto and digital assets. Some states, such as New Jersey and Kentucky, have also implemented their own regulations regarding crypto taxes. For example, Kentucky treats Bitcoin as a cash equivalent, while states like Arkansas and Missouri do not tax cryptocurrencies like Bitcoin.
Overall, Representative Gaetz’s bill seeks to introduce Bitcoin as a viable method of payment for federal taxes, in line with the growing acceptance and regulation of cryptocurrencies in the United States.