Congressman Gaetz Introduces Bill to Require the IRS to Accept Bitcoin for Federal Tax Payments

The bill proposes that taxpayers be allowed to use Bitcoin for federal tax payments, which Gaetz believes would "promote innovation, increase efficiency, and offer more flexibility to American citizens."

Congressman Matt Gaetz (R-Fla.) has introduced legislation that would require the Internal Revenue Service (IRS) to begin accepting federal tax payments in Bitcoin (BTC). Gaetz unveiled the bill on June 25, highlighting the potential benefits of this “bold move” and emphasizing its role in ensuring that the United States remains at the forefront of technological advancement. The Congressman stated: “My groundbreaking legislation will modernize our tax system by allowing federal income tax to be paid with Bitcoin. This is a bold step toward a future where digital currencies play a vital role in our financial system.”

Bitcoin for taxes

The bill proposes to allow taxpayers to use Bitcoin for federal tax payments, a move that Gaetz believes will “promote innovation, increase efficiency, and offer more flexibility to American citizens.” If enacted, the legislation would direct United States Secretary of the Treasury Janet Yellen to develop a plan for accepting Bitcoin as a legitimate form of currency for federal tax payments. Notably, Yellen has been a vocal critic of Bitcoin in the past, expressing opposition to cryptocurrencies.

The Congressman cited his recent visit to El Salvador, which became the first country to adopt Bitcoin as legal tender in 2021, as a key influence on his decision to introduce the bill. He noted that Bitcoin has helped enhance economic stability and job creation in Central America.

The Congressman’s proposal marks a significant shift in the approach to integrating digital currencies into the mainstream financial system, reflecting a growing recognition of their potential to reshape economic practices. Gaetz's proposal follows similar actions by several U.S. states. Colorado became the first to approve crypto payments for taxes in 2022, while Louisiana recently passed legislation that protects the right to self-custody and mine crypto. Meanwhile, Texas, Utah, New Jersey, and Kentucky are making strides toward similar policies.

Broader crypto regulation efforts

The introduction of the bill comes amid ongoing debates in Congress over how to regulate the burgeoning crypto industry. The House recently passed FIT21, a regulatory framework bill that will grant either the Securities and Exchange Commission (SEC) or the Commodity Futures Trading Commission (CFTC) full oversight of crypto trading. The bill also aims to establish a clear method to classify whether a digital asset should be considered a commodity or security, which is one of the primary hurdles to the industry’s growth in the U.S. The bill passed the House floor with strong bipartisan support and is expected to receive similar support in the Senate, which has yet to greenlight the legislation.

Mentioned in this article

Assad Jafri AJ, a passionate journalist since Yemen's 2011 Arab Spring, has honed his skills worldwide for over a decade. Specializing in financial journalism, he now focuses on crypto reporting.

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CryptoSlate is a comprehensive and contextualized source for crypto news, insights, and data. Focusing on Bitcoin, macro, DeFi and AI.

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