Ivanka Trump dismissed from New York fraud lawsuit against Trump family business

A New York state appeals court on Tuesday dismissed Ivanka Trump from the New York state attorney general’s civil fraud case against former President Donald Trump, the Trump Organization and three of his adult children.

The court ruled that legal claims against Ivanka Trump were too old because she left the family business to advise her father in the White House in early 2017. Attorney General Tish James filed her lawsuit in September 2022, too late to cover any alleged misconduct by Ivanka during her time at the company, according to the five-judge panel of the appeals court.

“The allegations against defendant Ivanka Trump do not support any claims that accrued after February 6, 2016,” the ruling said. “Thus, all claims against her should have been dismissed as untimely.”

The court also left open the possibility for the trial judge to further narrow the case.

James’ lawsuit alleges a yearslong fraud in which Donald Trump, his family business and the other defendants included false and misleading valuations on financial statements as a way to reduce the companies’ tax bills while winning favorable terms from banks and insurance companies.

The case is set to go to trial in October.

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The Pentagon tries to get AI right again

Russia’s use of military drones in Ukraine has grown so aggressive that manufacturers have struggled to keep up. China’s strategy for a “world-class military” features cutting-edge artificial intelligence, according to Xi Jinping’s major party address last year.

The Pentagon, meanwhile, has struggled through a series of programs to boost its high-tech powers in recent years.

Now Congress is trying to put new pressure on the military, through bills and provisions in the coming National Defense Authorization Act, to get smarter and faster about cutting-edge technology.

Defense pundits widely believe the future competitiveness of the U.S. military depends on how quickly it can purchase and field AI and other cutting-edge software to improve intelligence gathering, autonomous weapons, surveillance platforms and robotic vehicles. Without it, rivals could cut into American dominance. And Congress agrees: At a Senate Armed Services hearing in April, Sen. Joe Manchin (D-W.Va.) said AI “changes the game” of war altogether.

But the military’s own requirements for purchasing and contracting have trapped it in a slow-moving process geared toward more traditional hardware.

To make sure the Pentagon is keeping pace with its adversaries, Sens. Mark Warner (D-Va.), Michael Bennet (D-Colo.) and Todd Young (R-Ind.) introduced a bill this month to analyze how the U.S. is faring on key technologies like AI relative to the competition.

The 2024 NDAA, currently being negotiated in Congress, includes several provisions that target AI specifically, including generative AI for information warfare, new autonomous systems and better training for an AI-driven future.

Other members of Congress have started to express their concerns publicly: Rep. Seth Moulton (D-Mass.), who sits on the House Armed Services Committee, told Politico that the military has fallen “way behind” on AI and that military chiefs had received “no guidance.”

Sen. Angus King (I-Maine), who sits on the Senate Armed Services Committee, called Gen. Mark Milley, chair of the Joint Chiefs of Staff, in March looking for answers on whether the DOD was adapting to the “changing nature of war.” In response, Milley said the military was in a “transition period” and acknowledged it urgently needed to adapt to the new demands of warfare.

As AI has quickly become more sophisticated, its potential uses in warfare have grown. Today, concrete uses for AI in defense range from piloting unmanned fighter jets to serving up tactical suggestions for military leaders based on real-time data from the battlefield. But it still amounts to just a tiny fraction of defense investment. This year the Pentagon requested $1.8 billion to research, develop, test and evaluate artificial intelligence — a record, but still just a fraction of the nearly $900 billion defense budget. Separately, the Pentagon asked for $1.4 billion for a project to centralize data from all the military’s AI-enabled technologies and sensors into a single network.

For years, the Pentagon has struggled to adapt quickly to not just AI, but any new digital technology. Many of these new platforms and tools, particularly software, are developed by small, fast-moving startup companies that haven’t traditionally done business with the Pentagon. And the technology itself changes faster than the military can adapt its internal systems for buying and testing new products.

A particular challenge is generative AI, the fast-moving new platforms that communicate and reason like humans, and are growing in power almost month-to-month.

To get up to speed on generative AI, the Senate version of the 2024 NDAA would create a prize competition to detect and tag content produced by generative AI, a key DOD concern because of the potential for AI to generate misleading but convincing deep fakes. It also directs the Pentagon to develop AI tools to monitor and assess information campaigns, which could help the military track disinformation networks and better understand how information spreads in a population.

And in a more traditional use of AI for defense, the Senate wants to invest in R&D to counter unmanned aircraft systems.

Another proposed solution to rev up the Pentagon’s AI development pipeline is an entirely new office dedicated to autonomous systems. That’s the idea being pushed by Rep. Rob Wittman (R-Va.), vice chair of the House Armed Services Committee, who co-sponsored a bill to set up a new Joint Autonomy Office that would serve all the military branches. (It would operate within an existing central office of the Pentagon called the Chief Digital and Artificial Intelligence Office, or CDAO.)

The JAO would focus on the development, testing and delivery of the military’s biggest autonomy projects. Some are already under development, like a semi-autonomous tank and an unmanned combat aircraft, but are being managed in silos rather than in a coordinated way.

The House version of the 2024 NDAA contains some provisions like an analysis of human-machine interface technologies that would set the stage for Wittman’s proposed office, which would be the first to specifically target autonomous systems, including weaponry. Such systems have become a bigger part of the Pentagon’s future defense strategy, driven in part by the success of experimental killer drones and AI signal-jamming in the Ukraine war.

Divyansh Kaushik, an associate director at the Federation of American Scientists who worked with Wittman on the legislation, said the problem that the bill was trying to address was a lack of “strategic focus” from DOD on how to buy, train, test and field critical emerging technologies that are needed by all the service branches at once.

Pentagon leaders have acknowledged that the procurement rules that worked for acquiring traditional weapons like fighter jets do not translate well to buying new AI-enabled software technologies. “There's some institutional obstacles that are set up in the old way of doing procurements that aren't efficient for software,” said Young Bang, who leads the Army’s tech acquisitions as principal deputy assistant secretary of the Army.

Also in the House version of the NDAA is a mandate introduced by Rep. Sara Jacobs (D-Ca.) that asks the Pentagon to develop a process to determine what responsible AI use looks like for the Pentagon’s widespread AI stakeholders — including all the military forces and combatant commands. That process will need to build on the Pentagon’s own responsible AI guidelines, which debuted last June.

These new efforts follow many frustrated attempts to make the Pentagon better at buying and fielding cutting-edge tech.

Project Maven, a DOD effort to bring more commercially developed AI into the U.S. military, launched in 2017 with a strong push by tech executives Eric Schmidt and Peter Thiel. Parts of that project are now housed in the National Geospatial Agency.

Before that, the Pentagon had launched, then relaunched, the Defense Innovation Unit, which focuses on accelerating the adoption of commercial technology. That unit was effectively demoted to undersecretary purview by former Defense Secretary Gen. Jim Mattis, and is set to be elevated again to the defense secretary’s direct oversight in the 2024 defense bill.

And in 2019, bolstered by Project Maven, Congress created the Joint Artificial Intelligence Center or JAIC to develop, mature and deploy AI technologies for military use.

The JAIC was meant to speed the Pentagon’s adoption of the new technology. “None of the military services were doing AI at the speed and definitely not at the scale” that DOD leadership was looking for, said retired Lt. Gen. Jack Shanahan, the center’s inaugural director.

But despite additional authorizations by Congress expanding the scope and budget of JAIC from $89 million to $242 million across the 2019 and 2020 National Defense Authorization Acts, by late 2021, the JAIC was defunct, rolled into another Congress-mandated body: the Chief Digital and Artificial Intelligence Office, or CDAO.

Craig Martell, a commercial-sector hire who now heads the CDAO, said the military’s previous AI strategy was good for its time but had been outpaced by the technology itself: “The state of AI in the commercial sector, and the use of AI in military operations has changed significantly since the strategy’s creation.”

The Pentagon has issued new AI guidance since the days of JAIC. Kathleen Hicks, the current U.S. deputy defense secretary, flagged the Pentagon’s 2022 Responsible AI Strategy and Implementation Pathway document as evidence of the Pentagon’s commitment to responsible military use of AI and autonomy.

And Martell said the CDAO was working on an unclassified data, analytics and AI adoption strategy to replace the outdated one from 2018, to be released sometime later in the summer.

Congress is keeping its eye on that process. In the House version of the NDAA, Rep. Morgan Luttrell (R-Texas) asked the defense secretary to brief the House Committee on Armed Services by next June on the Pentagon’s enterprise efforts to train artificial intelligence with correctly attributed and tagged data.

The House and Senate will now need to reconcile their versions of the NDAA before President Joe Biden signs a final version into law.

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Civil rights notable James Meredith turns 90 urges people to press onward

JACKSON, Miss. — James Meredith knew he was putting his life in danger in the 1960s by pursuing what he believes was his divine mission: conquering white supremacy in the deeply, and often violently, segregated state of Mississippi.

A half-century later, the civil rights leader is still talking about his mission from God. In recent weeks, he made several appearances around his home state, urging people to obey the Ten Commandments and the Golden Rule in order to reduce crime. On his 90th birthday on Sunday, Meredith said older generations should lead the way.

“Old folks not only can control it — it’s their job to control it,” Meredith told The Associated Press in an interview Sunday after an event honoring him at the Mississippi Capitol.

Meredith is a civil rights icon who has long resisted that label because he believes it sets issues such as voting rights and equal access to education apart from other human rights.

During the event, Meredith fell while trying to stand and speak. He leaned on an unsecured lectern, and it crashed forward with Meredith on top. People nearby scrambled to return him to a wheelchair.

Meredith suffered no visible injuries. An ambulance crew checked him later, and then Meredith went to his home in Jackson to have a birthday celebration with his family. His wife, Judy Alsobrooks Meredith, said Monday that he was spending time with grandchildren and showing no signs of pain.

In October 1962, federal marshals escorted Meredith as he enrolled as the first Black student at the University of Mississippi, while white people rioted on the Oxford campus. Mississippi’s governor at the time, Ross Barnett, had stirred mobs into a frenzy by declaring that Ole Miss would not be integrated under his watch.

Meredith was a 29-year-old Air Force veteran who had already taken classes at one of Mississippi’s historically Black colleges, Jackson State. NAACP attorneys represented him as he obtained a federal court order to enter the state’s flagship public university. After a largely solitary existence at Ole Miss, Meredith graduated in 1963 with a bachelor’s degree in political science.

After graduating, Meredith set out to promote Black voter registration and show that a Black man could walk through Mississippi without fear. In June 1966, a white man with a shotgun wounded Meredith on the second day of a march from Memphis, Tennessee, to Jackson, Mississippi. With Meredith hospitalized, the Rev. Martin Luther King Jr., Stokely Carmichael and other civil rights leaders continued the march, often followed by long lines of activists and local people.

Less than three weeks after he was shot, Meredith had recovered enough to join the final stretch of what became known as the March Against Fear. It ended at the state Capitol, where an estimated 15,000 people gathered for Mississippi’s largest civil rights rally.

This year, Meredith had planned to walk 200 miles in Mississippi to spread his anti-crime message — roughly the same distance as the March Against Fear. Instead, he made a series of appearances in recent weeks, often using a rolling walker, a wheelchair or a golf cart.

On Sunday, Meredith rode in a golf cart for the final quarter-mile from Jackson City Hall to the Mississippi Capitol, led by a high school marching band and accompanied by dozens of people on foot. A racially diverse group of about 200 people sought shade under magnolia and oak trees while listening to songs, speeches and a child’s poem praising Meredith.

Flonzie Brown-Wright, a longtime Mississippi civil rights activist who participated in the 1966 March Against Fear, said she believes Meredith is a genius at creating strategies for social change.

“He is a very smart man, endowed with a lot of old-fashioned wisdom. He has been able to use that for the greater good of his people,” Brown-Wright said Sunday. “I love him like a big brother.”

In the decades since Meredith integrated Ole Miss, the university has erected a statue of him on campus and has held several events to honor him and his legacy.

John Meredith said Sunday that his father had a profound effect on higher education, but the March Against Fear had a greater impact on him as a son because it demonstrated the importance of elections.

“The silent gift of voting is the ability to help shape the laws under which you live. It is the beauty and the curse of America,” said John Meredith, the current city council president in Huntsville, Alabama. “Participation in voting yields inclusion, diversity and opportunity. Failure to vote results in the loss of freedom … and government oppression.”

At the Capitol birthday celebration, Iyanu B. Carson, a 5th grade student from Jackson, read her poem titled “90 Years of History,” saying she aspires to be like Meredith.

“You made the choice to use your voice, you were strong and made them believe you belonged,” Iyanu said. “Today we celebrate history, and Mr. Meredith, history is you! We’re proud of your accomplishments and all that you have been through.”

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Hollywood mogul acknowledges gifts to Netanyahu may have been excessive

JERUSALEM — A billionaire Hollywood mogul took the stand for a second day on Monday in Benjamin Netanyahu’s corruption trial, acknowledging that the long list of champagne, cigars and jewelry he systematically gave to the Israeli prime minister may have been excessive.

Arnon Milchan, whose production credits include “Pretty Woman,” “12 Years a Slave,” and “Bohemian Rhapsody,” is a key witness in one of three cases brought against Netanyahu. Prosecutors are trying to prove that Netanyahu committed fraud and breach of trust.

Milchan, 78, has been testifying by videoconference from Brighton, England, which is near where he is based.

Prosecutors hope his testimony, which began Sunday and is expected to last some two weeks, will provide details about the abundance of gifts given to Netanyahu and his wife. The gifts, the prosecutors maintain, led to favors from Netanyahu that advanced Milchan’s interests.

Netanyahu’s lawyers have said Milchan’s gifts were friendly gestures.

In his first day of testimony, Milchan described a friendship that included some gifts to the Netanyahus that turned into regular requests and “transformed into a routine.”

He said the routine became so frequent that he and the Netanyahus developed code words for the gifts. Cigars were known as “leaves,” champagne was known as “roses,” and luxury dress shirts were nicknamed “dwarves.”

He said he had instructed his aides to give the Netanyahus “whatever they want” and was assured by the prime minister that there was nothing illegal going on.

On Monday, Milchan said the gifts didn’t affect his friendship with the Netanyahus until a police investigation was opened and at which point, he said he realized the gifts were “excessive.”

Asked whether he had ever refused a request for gifts, Milchan said: “Not that I remember.”

Milchan also again stressed that he considered the Netanyahus friends, but recounted that he told police he felt uncomfortable that his gifts were not reciprocated.

According to the indictment against Netanyahu, Milchan gave Netanyahu and his wife a “supply line” of lavish gifts valued at nearly $200,000.

The indictment accuses Netanyahu of using his influential perch to assist Milchan to secure a U.S. visa extension by drawing on his diplomatic contacts, including former U.S. Secretary of State John Kerry.

Prosecutors also accuse Netanyahu of working to push legislation that would have granted Milchan millions in tax breaks.

Milchan testified Monday that he had turned to Netanyahu and others for help about the visa extension. He said Kerry called him one day and met with him at a hotel. Describing Kerry as a good friend, he said he was told Kerry could not help.

The prosecution and defense lawyers have been questioning Milchan in a hotel conference room in Brighton. While no journalists are allowed there, Netanyahu’s wife Sara, on a private visit to Britain, sat in for a second straight day.

Prosecutors have demanded that Sara Netanyahu not make eye contact with Milchan, fearing she could sway the witness.

The testimony is being aired in a Jerusalem courtroom for judges and other lawyers — who can also ask questions of Milchan — and for journalists and other attendees to watch.

Netanyahu, who has attended some of the hearings during his trial, was at the courtroom both on Sunday and Monday. Milchan, who is not charged in the case, greeted him in Hebrew over the two-way video broacdcast, using Netanyahu’s nickname: “Shalom, Bibi!”

Milchan is testifying in one of three cases being brought against Netanyahu. The other two, which include charges of bribery, fraud and breach of trust, accuse Netanyahu of exchanging regulatory favors with powerful media moguls for more positive coverage.

Netanyahu denies wrongdoing, claiming he is the victim of a witch hunt orchestrated by a liberal media and a biased justice system.

Netanyahu’s legal woes have dogged him politically, putting his fitness to rule while on trial at the center of a political crisis that sent Israelis to the polls five times in under four years.

They also have fueled accusations by critics that Netanyahu is pushing a contentious government plan to overhaul Israel’s judiciary as a way to escape the charges. Netanyahu denies those accusations.

The trial, which began in 2020 and has still not heard from Netanyahu himself, has featured more than 40 prosecution witnesses, including some of Netanyahu’s closest former confidants who turned against the premier.

Witness accounts have shed light not only on the three cases against Netanyahu but also revealed sensational details about his character and his family’s reputation for living off the largesse of taxpayers and wealthy supporters.

Milchan’s aide, Hadas Klein, testified last year that the Netanyahu family “loves gifts.”

The idea of a plea bargain has repeatedly surfaced, but prosecutors for now appear determined to see the trial through, despite reports last week that the judges warned them that the more serious crime of bribery will be hard to prove.

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Putin tells rebellious Russian fighters to swear allegiance or leave for Belarus

Russian President Vladimir Putin on Monday ordered mercenary troops who participated in the short-lived weekend rebellion to either swear allegiance to their country or leave for Belarus.

In evening remarks from the Kremlin, his first since a short address to the nation on Saturday, Putin presented part of the short-term resolution for the stunning turn of weekend events that upended the front in Russia’s invasion of Ukraine. On Friday, Yevgeniy Prigozhin, leader of the Wagner Group’s mercenary fighters, declared war against Russia’s military leadership and turned his troops toward Moscow. The advance was halted on Saturday after a peace deal brokered by Belarus’ president.

Putin’s remarks attributed the fault of the rebellion to Prigozhin, and he said the mercenaries could sign a contract with the Russian military, return to their families or go to Belarus.

“Wagner Group soldiers are also patriots, loyal to the state, they have proven this in combat,” Putin said, arguing that any rebellion attempt would have been unsuccessful. “They were used blindly, forced to turn on their comrades with whom they fought shoulder to shoulder.”

Putin also paid tribute to Russian air force pilots who he confirmed had been killed in the insurrection. Wagner forces previously claimed to have shot down several aircraft in its bid to secure territory.

In a Telegram message earlier on Monday, Prigozhin insisted that his actions over the weekend were not an effort to oust Putin as Russia’s leader.

“Our decision to turn back was driven by two factors,” Prigozhin said. “One, that we did not want Russian blood to flow. The second factor was that we went to demonstrate our protest, and not to overthrow the government of the country.”

On Friday, Prigozhin, who has tussled with Russian leaders on multiple fronts throughout the country’s invasion of Ukraine, ordered thousands of his mercenary troops to march toward capturing Moscow. They quickly secured several strategic bases south of Moscow, including the city of Rostov-on-Don, but stopped because of the deal that Belarus brokered.

Prigozhin said on Monday the deal would helpthe Wagner Group continue its operations, which reach not only into Russia’s war efforts in Ukraine, but also to several African countries. His precise whereabouts remain unknown.

The Biden administration has repeatedly stated that the U.S. had nothing to do with the Russian crisis, labeling it as an internal conflict.

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New York officials remember Richard Ravitch the state's top crisis solver for half a century

ALBANY, N.Y. — New York’s top leaders mourned the passing of longtime problem-solver Richard Ravitch, who died Sunday less than two weeks before his 90^th birthday.

“He was never elected to anything, yet he had arguably the most impactful and consequential role in state and city government over the past 50 years,” Comptroller Tom DiNapoli said in an interview with POLITICO, pointing to Ravitch’s time saving New York City from the financial crisis in the 1970s, running the Metropolitan Transportation Authority and spending 18 months as lieutenant governor.

“It really is quite a remarkable legacy.”

With a background in real estate, Ravitch had been appointed to various federal, state and local government entities since the 1960s.

His first prominent role came when newly-elected Gov. Hugh Carey asked him to head the massive Urban Development Corp. in 1975, soon after major banks told Carey they would no longer lend it money.

Ravitch managed to save the authority and keep it solvent. And within a few months, he played a major role bringing stakeholders together as New York City officials scrambled to save their own government from bankruptcy.

At the end of the decade, Carey appointed Ravitch to save yet another struggling state agency – this time, the MTA.

“He is the father of the modern MTA,” authority CEO Janno Lieber said at an unrelated press conference Monday morning. “When I was a kid and the subway system was as bad as it has ever been, Ravitch stepped up … and convinced us that it was possible to bring New York’s most iconic public facility back to life and make it great.”

(Not everybody was a fan of his tenure there – he proved himself “incompetent and incapable of running government,” Hyatt Grand Central developer Donald Trump once said of Ravitch, who refused to have the MTA pay for a private subway entrance for the hotel.)

Ravitch spent the following decades bouncing around a number of prominent roles. He organized a 1984 Olympics bid by New York City, led Major League Baseball’s labor negotiations in the 1990s and chaired a congressional commission on housing issues in 2000.

He finished third in the 1989 Democratic New York City mayoral primary, the closest he ever came to winning elected office.

He was eventually appointed to a top state post. But this was a job he would later dub “the most useless experience of [his] life.”

After ex-Gov. Eliot Spitzer’s resignation elevated Lt. David Paterson to the governorship, Paterson was left without a lieutenant governor. Leadership fights in the state Senate a year into Paterson’s tenure led to an intractable 31-31 gridlock in the chamber.

Nothing in the state constitution details any process for replacing a lieutenant governor, and the assumption for decades had been the job should remain vacant until the next election.

But in an attempt to find a tie-breaking Senate vote and end the Senate’s gridlock, Paterson decided to see what the courts would say if he went ahead and appointed one.

The courts ultimately concluded he had the authority to pick a replacement lieutenant governor, and Paterson turned to the most unimpeachable figure he could find.

“I thought that he was exactly the right type of person. I didn’t think the Republicans would see this as political chicanery,” Paterson recounted Monday.

He noted that even while the GOP was criticizing him over the process, “They said at the same time that the appointee was to them an outstanding appointment.” Ravitch would go on to “serve well,” Paterson said.

But Ravitch never settled into the role, usually one of the most powerless in state government. In his 2014 memoir, he described the lieutenant governor’s cavernous office space in the Capitol: “The rooms came to seem like a metaphor of the job I held; elaborate and empty.”

Eight months into his tenure, Ravitch’s falling out with Paterson was complete when he released a budget plan that competed with the governor’s at a time the state faced a major financial pinch.

Paterson was already on his way at the door at that point, with Democrats circling around then-Attorney General Andrew Cuomo as their next gubernatorial nominee, and any chance he would play a major role in shaping the administration ended.

But he never faded from the political scene or shied away from sharing his thoughts on newer issues.

“He became a good friend and advisor of mine,” Gov. Kathy Hochul said at a press conference on Monday. “We had lunch together not that long ago. He told me all the things I need to do, as he always would.”

DiNapoli said Ravitch “adopted” him as “one of his special projects, to mentor me and share the wisdom of his experience.”

“I was definitely on his speed dial list. And the thing about Dick is he was relentless when he was on an issue or a topic; he would call pretty much anytime day or night if he was hot on something. Either gently suggesting what I should do, or more aggressively demanding what I should do, and would not take no for an answer very easily.”

While governors and politicians were similarly on Ravitch’s call list, DiNapoli said, he always took the time to meet with “an aspiring City Council candidate, or an Assembly candidate … He made you feel that being involved in public service was an honorable calling.”

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Crypto mystery: New tax rules are MIA

The crypto world has been bracing for a tax crackdown from the Treasury Department for more than a year-and-a-half, ever since Congress approved new rules aimed at making it easier for the IRS to determine how much money people make trading virtual currencies.

Since then: silence.

Though the IRS considers crypto a major source of tax avoidance, not even a first draft of the regulations needed to fill in the details of the new transaction-reporting requirements has been released by the administration.

Adding to the mystery is that the rules appear to have been written, having been blessed months ago by the White House budget office — which, until recently, was one of the last bureaucratic steps in the process of issuing regulations.

In the meantime, the start date for the rules has been put off indefinitely.

That has perplexed many, from members of Congress to lawyers like Lisa Zarlenga, a cryptocurrency tax expert at Steptoe.

“This is the single easiest thing they can do to improve compliance, and they’re not doing it,” said Zarlenga, a former Treasury tax official.

“I’ve been scratching my head.”

The IRS’s tortoise-like pace contrasts with the aggressive campaign to clamp down on crypto being waged by the Securities and Exchange Commission, which has sued to force industry giants Coinbase and Binance to follow its regulations.

The delay also comes amid a high-profile push by the administration to reduce the estimated $500 billion in taxes that go uncollected every year, a big reason why Democrats pushed through a one-time $80 billion cash infusion for the IRS.

The tax agency had been asking lawmakers for the new crypto rules for years, saying it needed more power to root out tax avoidance by people trading digital assets.

During the debt-limit negotiations, President Joe Biden complained that Republicans wouldn’t agree to a second crackdown dealing with so-called wash sales that would prevent crypto holders from using paper losses to erase their tax bills.

In a statement, Treasury spokesperson Kristin Lynch said: “Treasury is working diligently to finalize these important and complicated regulations.”

She did not respond to questions about the reasons for the delay or when the rules might be released

The still-gestating regulations could be controversial for the agency, reviving a contentious fight like the one seen in Congress when it first approved the rules.

At the time, in 2021, lawmakers were deeply divided, even within each party, over what corners of the digital asset world should be subject to the requirements. Odd bedfellows like Senate Finance Committee Chair Ron Wyden (D-Ore.) and Sen. Cynthia Lummus (R-Wyo.) said the rules went too far.

Lawmakers wanted the $28 billion the crackdown was projected to raise to help defray the cost of an infrastructure spending bill.

Congress left many of the details to be sorted out by Treasury, and those with a stake in the issue are now anxious to see whether the rules apply not only to obvious targets like Coinbase but also things like decentralized exchanges, people who make “cold wallets” and miners.

The IRS already requires people to report crypto transactions on their annual returns. And to underscore that point, the agency began requiring people to say on their filings whether they owned virtual currencies at any point in the year (in 2021, 2.3 million filers answered “yes”).

But the agency does not have an easy way to determine whether what the taxpayer reports on a return is true or complete, having to resort to audits and John Doe summonses to exchanges for the information. It’s such a big problem that experts have trouble even estimating how much in crypto-related taxes go uncollected.

That’s where the rules approved by Congress come in. They require brokers to report to the IRS, as well as their customers, how much they saw in gross proceeds from selling digital assets.

The idea is to not only provide the IRS with independent data about transactions. If people know someone else is reporting to the IRS, they are less likely to omit the information from their returns.

That’s been part of Washington’s tax-collection playbook for more than 30 years, with lawmakers repeatedly expanding such “third-party reporting” to an ever-widening circle of payments. The IRS now collects more than 50 “informational” returns detailing how much people are paid at their jobs and how much they made selling stock and how much interest they paid on their mortgage.

Advocates say expanding those requirements to crypto would not only improve tax collections. It would also make it easier for people holding digital assets to do their taxes, especially if they are frequent traders because they won’t have to track each individual sale.

The rules were supposed to take effect in January, but the administration announced late last year they would be delayed.

The rules were OK’d by the White House Office of Information and Regulatory Affairs in February, which had been one of the final steps in issuing regulations. The administration recently announced OIRA will no longer review tax regulations.

Even once the rules are released, they’ll only be the initial draft — the administration still must take public comment on them before finalizing the requirements. Some experts predict the agency won’t make them effective in the middle of a tax year because that would cause too many headaches, which means the start date could be a long way off.

Critics complain that amounts to a windfall for the crypto world.

At a recent House Financial Services Committee hearing, Rep. Brad Sherman (D-Calif.) asked Treasury Secretary Janet Yellen when the rules might be released.

“The SEC has proved they’re not afraid of the crypto bros, I know you’re not afraid of the crypto bros, I hope the IRS is not afraid of them — when are we going to see these regulations?” asked Sherman, ranking member of the panel’s subcommittee on capital markets.

Said Yellen: “We’ll get back to you on that shortly.”

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