U.S. Senators Forge Crypto Tax Reporting Rules Over The Weekend
Several U.S. Senators have been negotiating over the amendment language in a cryptocurrency tax reporting provision of the Infrastructure Investment and Jobs Act, which is one of many offsets designed to pay for the costs of the bill. These lawmakers are facing tremendous time pressure from the White House as well as the Senate Majority Leader Chuck Schumer (D-NY), to the point that the possibility still exists the bill could be moved to a vote without the amendment being considered.
In May, Forbes reported the tax enforcement plan from Biden included crypto tax reporting and just a few days ago, the White House updated its fact sheet on the bill that among many ways to pay for the bill includes the “...strengthening of enforcement when it comes to crypto currencies.” The increased crypto tax reporting is expected to raise $28 billion over ten years, although the degree to which Senators continues to carve out exceptions in the current language over who must report as a ‘broker’ under IRS rules may result in a need to recalculate this number.
A new Amendment from Senator Mark Warner (D-VA) and Krysten Sinema (D-AZ), that according to reports in the Washington Post, is being pushed by the Treasury Department and the current Administration, was updated to exclude proof-of-stake validators as well as proof-of-work cryptocurrency miners from the crypto tax reporting provision. Warner noted to reporters that this was likely the final list of exemptions, which leaves software developers and decentralized platforms exposed to the new statute, should it pass.
Meanwhile, the original amendment to the bill that has the support of the nascent cryptocurrency lobby in Washington D.C., is authored by Senator Pat Toomey (R-PA), Senator Cynthia Lummis (R-WY) and Senator Ron Wyden (D-OR). This amendment does seek to offer protection for software developers, hardware manufacturers, and bitcoin miners.
What the cryptocurrency industry left with appears to be a choice between a favored Amendment with language from U.S. Treasury against Senators that have been lobbied to include a broader set of exemptions to avoid harming the growth of innovation in the U.S. The Senate is set to reconvene tomorrow at 12pm ET , where it is expected the pressure to move the debate to a close and vote on the infrastructure bill will continue, leaving the cryptocurrency community in suspense as to the future of tax reporting requirements and obligations that appear very close to becoming law.Source