Bill seeks to allow Bitcoin payments for federal income tax

Rep. Matt Gaetz II (R-FL, 1st District) has introduced legislation enabling Americans to pay their federal income taxes using Bitcoin. The bill aims to amend the Internal Revenue Code of 1986 to allow tax payments to be made with the alpha crypto.

Notably, the bill did not specify whether the legislation would extend or would be open to other crypto payment options, and also did not specify if stablecoins would be accepted. The bill is specifically asking for “a method to allow for the payment with bitcoin of any tax imposed on an individual under this title.”

The proposed legislation directs the Treasury Secretary to develop and implement a method for accepting Bitcoin payments for individual federal income taxes. It calls for regulations specifying when such payments would be considered received and requiring immediate conversion of Bitcoin amounts to dollars.

“By enabling taxpayers to use Bitcoin for federal tax payments, we can promote innovation, increase efficiency, and offer more flexibility to American citizens,” Gaetz said in a statement made to The Daily Wire, which first published the initiative.

Gaetz frames the bill as a step toward integrating digital currencies into the US financial system, where he believes these could “play a vital role” and ensure that the country remains “at the forefront of technological advancement.”

The bill includes provisions for the Treasury to contract services related to receiving Bitcoin payments. It also addresses liability issues and confidentiality concerns similar to existing tax payment rules. If enacted, the changes would take effect one year after the bill becomes law.

Several states have already begun implementing crypto tax regulations, with Colorado approving crypto for tax payments. The IRS currently requires reporting of digital asset transactions and taxation of crypto income and gains.

Gaetz’s proposal aligns with recent crypto-friendly stances from some Republicans. Former President Trump has pledged to end what he calls President Biden’s “war on crypto” if re-elected. The bill’s introduction comes shortly after Gaetz attended the second inauguration of El Salvador’s president, who made Bitcoin legal tender in 2021.

This article first appeared at Crypto Briefing