New bill to tweak crypto reporting requirements

As Biden signs the new infrastructure bill, senators have drafted a new stand-alone bill that seeks to narrow the definition of who exactly will be obliged to report tax data to the IRS.

As the infrastructure bill becomes law this Monday, bi-partisan group of senators have worked together to come up with a bill that will more explicitly define how the crypto tax reporting rules are applied.

According to an article on Bloomberg, two senators, one from each side of the house, have worked out the proposed changes. Senator Cynthia Lummis, and Senator Ron Wyden were those responsible. Wyden stated:

“Our bill makes clear that the new reporting requirements do not apply to individuals developing blockchain technology and wallets. This will protect American innovation while at the same time ensuring those who buy and sell cryptocurrency pay the taxes they already owe.”

The new bill proposal came after many concerns were raised as to who exactly was required to report tax information to the Internal Revenue Service. The very  broad language contained in the infrastructure bill meant that this could be applied to entities such as miners and software developers who would have found it impossible to comply with such a requirement. For her part, Lummis said in a statement:

“Digital assets are here to stay in our financial system and the decisions we make now will have impacts far into the future. We need to be fostering innovation, not stifling it.”

The new stand-alone bill is to be retroactive to the signing of the infrastructure bill, should it be approved. According to Bloomberg, it’s not known exactly when this bill would come up for a vote, or whether it will be included in another legislative package before the year’s end.

The original infrastructure bill has remained intact until it becomes law on Monday, despite the best efforts of high-visibility lobbyists from the crypto sector such as Jack Dorsey of Square, and Brian Armstrong of Coinbase. 

Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.