Subject: Public Comment For Re-opened S7-02-22
From: Anonymous
Affiliation:

Oct. 23, 2023

Sure, let me summarise some of the key potential downsides or risks regarding to the SEC's new gross proceeds and basis reporting requirement for brokers:
Increased compliance costs and administrative burden for brokers, especially related to building out tracking systems and processes for digital asset transactions. This could lead to higher fees for consumers. Potential for errors in basis calculation and reporting if broker tracking systems are not sufficiently advanced. Inaccuracies could cause problems during audits. Cybersecurity and privacy risks from brokers storing more customer transaction data, especially for digital assets. Safeguards will need to be in place. Some investors may see the increased transparency into their capital gains/losses as an invasion of privacy. Brokers may limit which digital assets they directly handle to avoid compliance headaches from hard-to-track assets. Could inhibit options. Tax loss harvesting strategies could become more difficult with full gain/loss reporting to the IRS each year. Possibility of selective IRS audits or enforcement on taxpayers with major digital asset activity based on the new reported data. General concerns about increased costs, compliance burdens, privacy risks, and potential for errors or limited investment options because of the new reporting requirement. 
Thanks for the privilege given to me.