The cryptocurrency industry won’t relent in fighting the new tax rules recently passed by the US Congress. The bipartisan infrastructure bill passed by House Representatives last Friday awaits President Joe Biden’s signature to officially make it law.
The House bill targets individuals and businesses transacting in cryptocurrencies (such as Ethereum or Bitcoin) to execute their daily or regular services.
If the House bill becomes law, these individual investors and businesses will be required to report those transactions to the Internal Revenue Service (or IRS) — much like securities brokers report their stock and bond trades every day.
In addition, businesses will be obligated (if the bill is signed into law) to report any cryptocurrency transactions clocking above $10,000 to the IRS.
An “excuse” to collecting overdue tax
According to an analysis by the Joint Committee on Taxation, the House bill’s advocates argue it’s an “obvious excuse” — by the government, of course — to improve tax collection for its $28 billion taxes owed within ten years.
The crypto industry said it’ll continue fighting the enactment of the bill, citing the new rules will incriminate daily crypto users, technology providers, developers, and crypto mining companies — forcing them to gather and report information for the IRS that might implicate them into potential felony convictions (and 5-year jail terms).
That said, the industry remains hopeful that [soon] Congress will make an amendment — on the second major spending bill — easing the “reporting of transactions” rule before the provisions of the new rules take effect on January 1st, 2024.
Several legislators are in favor of amendments
Jerry Brito, executive director at Coin Center’s think tank, said he has reached out to several legislators about this on Twitter on Friday.
”We’ve been working with several members of the House to introduce stand-alone bills to amend the new crypto tax reporting provisions. We would have over two years to get these passed”.
Several legislators also support the amendment of the new laws, including Republicans Rob Portman of Ohio, Cynthia Lummis of Wyoming, and Pat Toomey of Pennsylvania.
Senate Democrats in support of changes to the law include Ron Wyden of Oregon, Mark Warner of Virginia, and Kyrsten Sinema of Arizona.
In Congress, leaders of the bipartisan blockchain committee, which has a total of over 30 members, are also in favor of amending the language of the new rules.
Adopting these new tax rules is seen by many as giving the IRS more power to choose whose transaction information needs reporting. Crypto industry players are more than ready to defend their interests as the IRS prepares to implement the new tax rules.
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