- US President Joe Biden recently passed the $1 trillion infrastructure bill, which contains tax provisions for cryptocurrency brokers.
- Two senators have now introduced a new bill to amend the crypto language of the infrastructure package.
- The proposed amendment would exclude node operators and developers from following information reporting requirements to the IRS.
The United States President, Joe Biden, has signed the Infrastructure Investment and Jobs Act into law on November 15, which contains new reporting requirements for cryptocurrencies. On the same day, a bipartisan team of senators also introduced a bill to amend the digital asset reporting requirements, which were seen as overly broad.
Senators aim to narrow tax rules for crypto brokers
The infrastructure bill, which aims to raise revenues, includes new definitions for brokers among cryptocurrency industry participants. While the new definitions were aimed at increasing transparency for the Internal Revenue Service (IRS), it also implies that network participants such as node operators would also need to report identifying information of digital asset transactions.
The cryptocurrency community has expressed concerns over the crypto tax provision as part of the infrastructure bill, stating that it was overly broad and could be problematic for decentralized finance (DeFi), node operators and software developers.
Senator Cynthia Lummis (R-WY), a Bitcoin investor herself and Senator Ron Wyden (D-OR), joined forces and wrote a new bill that would reverse some of the cryptocurrency provisions in the bipartisan infrastructure package.
According to the senators’ draft, the bill would seek to revise the rules of construction that apply to information reporting requirements imposed on digital asset brokers. It highlighted that individuals who are developing blockchain technology should be excluded from reporting information regarding their users to government agencies.
Senator Lummis stated that cryptocurrencies are “here to stay” in the American financial system, and the decisions that are being made would have impacts far into the future. He added, “We need to be fostering innovation, not stifling it.”
Under the amendments put forward by the senators, the tax reporting requirements would no longer apply to developers and node operators, according to Senator Wyden. The two senators have long been advocating for privacy protections for American citizens.
Ultimately, the definition of a broker as part of the infrastructure bill will be decided by the Treasury.
