Rep. Matt Gaetz (R-FL) is introducing a bill that would allow the federal income tax to be paid with Bitcoin, The Daily Wire can exclusively reveal.
The legislation, if enacted, would amend the Internal Revenue Code of 1986 with language ordering the Treasury secretary to develop a plan for accepting the popular decentralized digital currency.
“By enabling taxpayers to use Bitcoin for federal tax payments, we can promote innovation, increase efficiency, and offer more flexibility to American citizens,” Gaetz told The Daily Wire.
He continued, “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.”
Gaetz recently traveled to El Salvador to attend the second inauguration of President Nayib Bukele. In 2021, Bukele led his country to become the first nation to adopt Bitcoin as legal tender.
He is an ally to former President Donald Trump, whose campaign recently started accepting crypto donations, drawing a contrast to the Biden administration’s crackdown on the industry.
At a rally earlier this month, Trump said he would end President Joe Biden’s “war on crypto.” And he pledged, “We will ensure that the future of crypto and the future of Bitcoin will be made in America.”
Gaetz’s legislation would have the Treasury secretary “prescribe” regulations he or she deems necessary to receive payments on “certain” federal taxes with Bitcoin.
The congressman told The Daily Wire his proposal would “modernize our tax system by allowing federal income tax to be paid with Bitcoin.”
Provisions in the bill call for regulations that “specify when payment by such means will be considered received” and “require the immediate conversion of any bitcoin amount received to its dollar equivalent at the conclusion of any transaction.”
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It demands rules to “identify types of nontax matters related to payment by such means that are to be resolved by persons ultimately liable for payment and financial intermediaries, without the involvement of the Secretary.”
The bill also seeks to “ensure that tax matters will be resolved by the Secretary, without the involvement of financial intermediaries.”
Other sections tackle contracts related to receiving payment by Bitcoin, fees, and liability. There is also a provision that says the revised language would apply to payments made one year after enactment.
The Internal Revenue Service (IRS) already requires people to report transactions related to digital assets and pay taxes on income or gains from crypto.
A handful of states, including New Jersey and Kentucky, have begun to implement their own crypto tax regulations. Colorado has even approved the use of cryptocurrency for tax payments.
