Lawmakers introduce bill aimed at crypto reporting rules in infrastructure package
A bipartisan group of House lawmakers is introducing a bill Thursday that aims to narrow the scope of qualifying cryptocurrency "brokers" subject to a tax reporting provision included in the new infrastructure law.
Why it matters: The provision created an uproar in early August within the cryptocurrency industry as it would force a wide range of network participants to report transaction information to the government even if it's technically impossible for them to do so.
Background: The infrastructure law's language doesn't explicitly (or more clearly) exclude parties like miners, node operators, and software developers.
- "Such a requirement is essentially forcing miners, lightning nodes, etc., to identify others on the network," Coin Center executive director Jerry Brito tweeted in August. "Not only is this nonsensical from a technical perspective, such a mandate would very likely be unconstitutional surveillance."
- Two attempts to correct the language before the infrastructure bill passed into law ultimately failed after Sen. Richard Shelby (R-Ala.) blocked the amendments for lack of support for his (unrelated) amendment.
Driving the news: The new bill, the "Keep Innovation in America Act," introduced by Rep. Patrick McHenry (R-N.C.), a Financial Services ranking member, and Rep. Tim Ryan (D-Ohio), alongside eight other lawmakers, would:
- Refine "broker" as "any person who (for consideration) stands ready in the ordinary course of a trade or business to effect sales of digital assets at the direction of their customers," and clarify what information they're required to collect, along with clarify the definition of "digital asset."
- Push back the effective reporting date from Dec. 31, 2023 to Dec. 31, 2015.
- And it would require Congress to study the implications of expanding the definition of "cash" for reporting purposes.
- Several cryptocurrency lobbying and advocacy groups provides statements of support for the bill.
Yes, but: The bill still needs to pass.