The $1.2 trillion bipartisan infrastructure bill was passed by the United States House of Representatives. If signed into law in January by President Joe Biden it would establish new provisions regarding crypto-tax reporting.
The Biden administration first proposed the infrastructure bill. It was intended to improve the nation’s transport network and internet coverage. The bill imposed strict reporting requirements on the crypto community. All digital asset transactions exceeding $10,000 must be reported to IRS.
Cointelegraph reported that the Senate approved the bill on August 10th with a vote of 69-30. A group of six senators, including Rob Portman and Cynthia Lummis, met with a proposal for a compromise amendment to the bill. Toomey claims:
“This legislation imposes an inexact and sometimes unworkable cryptocurrency tax reporting mandate that could threaten future technological innovation.”
The infrastructure bill, despite the fact that it is not clear in its text, intends to treat crypto community’s transaction validators, software developers and node operators similarly to brokers of traditional institutions.
After securing 228-206 votes, the House of Representatives passed President Biden’s controversial infrastructure bill. The crypto community also expressed concern about the vague definition of “broker” that could lead to unrealistic tax reporting requirements for subcommunities like the miners.
this bill is unconstitutional and inherently anti-American private citizens have the right to financial privacy and financial freedom absolutely shameful to see this https://t.co/O9FkVC2CF4
— Meltem Demir*rs (@Melt_Dem) November 4, 2021
Inability to reveal crypto-related earnings as a result of this will be considered a tax violation, and even a felony.
Related: A 8-word Crypto Amendment in Infrastructure Bill is an ‘affront against the rule of law’
Experts in legal matters recommended amending the infrastructure bill to make failure to report digital asset transactions a crime.
Abraham Sutherland, a University of Virginia School lecturer, raised concerns about the US government’s decision not to classify crypto sub-communities in general as brokers.
It’s bad for everyone who uses digital assets, but especially for decentralized finance. DeFi would not be banned by the statute. It imposes reporting obligations that, given DeFi’s working nature, make it impossible to meet.