US Representatives Propose IRS Accept Bitcoin for Tax Payments Is Cryptocurrency Becoming a Political Tool

Yesterday, Republican Congressman Matt Gaetz of the United States House of Representatives called for the Secretary of the Treasury (DOT) to establish a plan that would allow local residents to pay federal income taxes using Bitcoin. He claimed that this initiative would modernize the tax system, promote innovation, and enhance administrative efficiency. With this move, political maneuvers involving crypto issues have once again come to the forefront.

Congressman Matt Gaetz introduced a bill on Tuesday requesting the Internal Revenue Service (IRS) and the Secretary of the Treasury to develop a plan for people to pay federal income taxes using Bitcoin.

In a statement, Gaetz highlighted the benefits of Bitcoin in promoting financial stability and job creation in Central America, as he became aware of them during the second inauguration ceremony of Salvadoran President Nayib Bukele.

This groundbreaking legislation aims to leverage Bitcoin to modernize our tax system, foster innovation, improve capital efficiency, and provide greater financial flexibility for American citizens. Gaetz emphasized that digital currencies will play a significant role in the financial system, ensuring that the United States maintains a leading position in technology.

According to an announcement from the Colorado Department of Revenue (DOR), Colorado is currently the only state in the US that accepts cryptocurrency for tax payments. Since September 2022, Colorado has been accepting cryptocurrency for both corporate and individual income taxes, with an additional $1 service fee plus 1.83% of the payment amount.

Previously, Republican Senator Ted Cruz introduced a bill last year to require shops at Capitol Hill to accept cryptocurrency payments, although it has not yet been voted on.

During election years in the US, politicians often use popular topics to divert public attention away from unfavorable media coverage, a tactic that has become commonplace. However, cryptocurrency issues seem to have become the latest means of confusing the public by some US lawmakers. Matt Gaetz’s recent public support for including Bitcoin in federal tax payments, in addition to his prior support for the Financial Innovation and Technology Act of the 21st Century (FIT21), stands as a rare public declaration of his stance on digital assets.

Interestingly, the House Ethics Committee announced last week that it is investigating Gaetz over allegations of misconduct and illegal drug use, raising questions about the timing of this proposal as a potential distraction.

Another classic example is former US Presidential candidate Donald Trump, who, upon announcing his candidacy, emphasized his stance on crypto, releasing several NFT collections, accepting cryptocurrency donations, and pledging to protect Bitcoin mining, using these issues as key points in his campaign strategy in response to potential threats from opponent Joe Biden. At the same time, Trump faces multiple controversial criminal and civil lawsuits, having recently become the first US President convicted of crimes, facing 34 felony convictions, each carrying a maximum of four years in prison and millions of dollars in defamation and fraud compensations.