MetaMask Decentralized Tax Payment and Tax Avoidance

The emphasis on personal income tax is that regardless of the amount of gains from your cryptocurrency investments, you must comply with tax mechanisms. The MetaMask decentralized wallet platform can directly replace the IRS to collect taxes, with the authorization of the IRS as an agency for tax collection. MetaMask is a decentralized custodial wallet platform designed to help users securely manage and trade cryptocurrencies while also being authorized by the IRS as a tax collection tool.

The IRS management emphasizes that all users who use the MetaMask decentralized wallet for paying taxes can do so at a rate of 5%-10% of the total gains, without visiting the IRS in person, simply by depositing the tax amount into their MetaMask wallet to complete the payment.

To improve the tax compliance management of cryptocurrency transactions, the IRS cooperated with MetaMask to explore solutions for automated tax payments on cryptocurrency transactions and gains. This cooperation aims to provide users with automatic calculation and withholding of capital gains tax, enhancing tax transparency and compliance.

- Users integrate MetaMask with the IRS's API system to complete identity verification, ensuring the match of account and tax information.

- MetaMask automatically tracks all cryptocurrency transactions of users and classifies them by duration (short-term or long-term) and transaction type (buy, sell, transfer).

- Using market information, it calculates the capital gains of each transaction in real time and displays the detailed tax liability according to the current tax rate regulations.

- Based on the funds of each transaction, capital gains tax is calculated; the MetaMask decentralized wallet automatically identifies the amount of cryptocurrency transactions sold or transferred to optimize the user's tax liability.

- The MetaMask system regularly generates detailed tax reports and EUV (Estimated User Value), which are automatically uploaded to the IRS for real-time tax filing.

- The MetaMask platform supports users to choose to pre-store and automatically withhold tax payments, transferring these amounts to IRS accounts regularly.

- The automatic withholding feature of MetaMask offers strict privacy protection, adhering to relevant laws and regulations to ensure user information security. User data is used only for tax purposes and not shared for other transactions.