Rep. Matt Gaetz Introduces Bill to Allow Bitcoin for Federal Tax Payments
U.S. Congressman Matt Gaetz (R-FL) has introduced groundbreaking legislation that would require the Internal Revenue Service (IRS) to accept Bitcoin as payment for federal income taxes. The bill, aimed at modernizing the U.S. tax system, seeks to amend the Internal Revenue Code of 1986 and mandate the Treasury Secretary to implement a program enabling taxpayers to use the world’s most popular cryptocurrency for tax payments.
Gaetz, who recently attended the second inauguration of El Salvador’s President Nayib Bukele, cited the Central American nation’s success with Bitcoin as legal tender as inspiration for the bill. He stated, “By enabling taxpayers to use Bitcoin for federal tax payments, we can promote innovation, increase efficiency, and offer more flexibility to American citizens.”
The proposed legislation outlines several key provisions, including:
- Specifying when Bitcoin payments are considered received
- Requiring immediate conversion of Bitcoin to its dollar equivalent upon transaction completion
- Addressing liability and confidentiality issues, applying rules similar to those for other payment methods
- Allowing the IRS to enter into contracts for services related to receiving Bitcoin payments
If passed, the bill would take effect one year after enactment, giving the Treasury time to develop necessary regulations and infrastructure.
This move aligns with growing interest in cryptocurrency within political circles. Former President Donald Trump, an ally of Gaetz, recently began accepting crypto donations for his campaign and has pledged to “end President Joe Biden’s war on crypto” if re-elected.
While the bill represents a potentially significant step towards mainstream adoption of cryptocurrency in the United States, it faces an uncertain future in Congress. Currently, only Colorado allows the use of crypto for state tax payments, and federal lawmakers are still grappling with broader cryptocurrency regulations.
The introduction of this bill comes as Congress debates various cryptocurrency-related legislation, including frameworks for stablecoin regulation and overall industry oversight. As the 2024 election approaches, cryptocurrency is emerging as a potential wedge issue, with both parties reassessing their positions on digital assets.
