US lawmakers introduce bipartisan bill to modify a crypto tax provision in Biden’s infrastructure deal

US lawmakers introduce bipartisan bill to modify a crypto tax provision in Biden’s infrastructure deal

  • US lawmakers introduced a bill Thursday that seeks to modify a crypto tax provision in the newly passed infrastructure deal.
  • The Keep Innovation in America Act is led by Representatives Patrick McHenry and Tim Ryan.
  • The bill also is intended to modify a section of the law that amends the Internal Revenue Code Section 6050i.
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US lawmakers introduced a bipartisan bill Thursday that seeks to modify a cryptocurrency tax provision in President Joe Biden’s newly passed infrastructure deal.

The Keep Innovation in America Act, led by Representatives Patrick McHenry (R-North Carolina) and Tim Ryan (D-Ohio), is meant to clarify the definition of a crypto “broker” as spelled out in the Infrastructure Investment and Jobs Act that was signed into law on November 15.

Lawmakers and crypto advocates have been in different camps about how broadly or narrowly to define the term, which would determine the companies that fall under new cryptocurrency tax-reporting rules.

The current language’s ambiguity has been a point of contention, even though the tax provisions will take years to take effect.

The infrastructure package defines a broker as “any person who is responsible for regularly providing any service effectuating transfers of digital assets on behalf of another person.” 

But that means crypto miners and software developers would be subject to reporting customers’ information even when they have no way of collecting that data, as Insider previously reported in August. And given the decentralized nature of blockchain technology, critics have questioned who exactly will respond to potential requests from the government should these arise.

This is why the new bill proposes redefining a broker to be “any person who stands ready in the ordinary course of a trade or business to effect sales of digital assets at the direction of their customers.”

The bill also aims to modify the Internal Revenue Code Section 6050i, which was originally designed nearly 40 years ago as an anti-money laundering measure. Biden’s infrastructure deal would apply that code to require anyone who receives more than $10,000 in digital assets to report their personal information to the IRS within 15 days by filling out Form 8300. 

The new House bill comes after Senators Ron Wyden (D-Oregon) and Cynthia Lummis (R-Wyoming) in August introduced their own bill that aimed to narrow the scope of the “broker” definition to exclude crypto miners and software developers from the tax reporting requirements in the bill.

https://ragheadnews.com

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