Legislators on both sides of the aisle oppose changes to tax reporting rules for crypto brokers and $ 10,000 transactions in the new infrastructure bill.
Ten Democratic US Congressmen, led by Florida Representative Darren Soto, have called for a change to the definition of broker in the Infrastructure Act, which went into effect November 15.
The group released an open letter signed by Soto, along with Representatives Ro Khanna, Stacey E. Plaskatt, Eric Swalwell, Tim Ryan, Susan Wild, Marc Veasy, Jake Auchincloss, Al Lawson, and Charlie Crist, asking for updates. Updated section 6045 (c) (1) of the tax code according to the non-partisan infrastructure framework (BIF).
Experts warn that the controversial new rule could result in miners, validators and wallet developers being treated as brokers for tax purposes. The letter calls on House spokeswoman Nancy Pelosi to expel the group on the grounds that it does not provide brokerage services.
Together we create more tax security for # Cryptocurrency and are working with the IRS on major reforms. Together we will continue to support innovation and protect consumers. pic.twitter.com/xu1Dj2GAqD
– Representative Darren Soto (@RepDarrenSoto) November 16, 2021
The letter also addresses concerns about negative market effects and how the United States will maintain its pace of technological innovation if regulations do not change.
“As written today, the BIF will increase uncertainty in the crypto industry, select winners and losers, and hinder the IRS’s efforts to adequately tax cryptocurrencies. It is time to end our country’s competitive advantage over other countries in the digital asset market . “
Senators are also pushing to change tax reporting requirements in the BIF. As Bloomberg reports, Democratic Senator Ron Wyden and Republican Senator Cynthia Lumis have tabled bill that they believe will protect American innovation and ensure Americans pay the bills and taxes they owe, and “does not apply to individuals who develop blockchain technology and wallets ”.
Related: U.S. Senators Filed Resolution To Allow Crypto Payments In The Capitol Complex
Republican Senator Ted Cruz also passed a law on November 16 to amend the tax code. He called the new reporting rules a “devastating attack” on the crypto industry. His concerns echo some of the House Democrats’ comments that the current provision would stifle American innovation and “threaten the privacy of many Americans.”
Senators in general are only now beginning to gain a deeper understanding of how the crypto industry works. The Joint Economic Committee of the US Congress held a hearing on November 17, entitled Demystifying Cryptocurrency: Digital Assets and the Role of Government. At that hearing, they discussed the complex tax authorities that should manage the centralized exchange and agreed that privacy and security were the most important issues.