Senators from both parties have asked Janet Yellen, Treasury Secretary, to clarify language in the infrastructure bill that President Joe Biden signed. It relates to crypto tax reporting.
Senators Rob Portman and Mike Crapo, Pat Toomey and Mark Warner, Kyrsten Silena, Cynthia Lummis, and Kyrsten Sinema wrote to Yellen on Tuesday asking for “information or informal guidance” regarding the definition of “broker”, which was included in HR 3684, the infrastructure law. The current text requires that all persons in the crypto space, including miners, developers of software, transaction validators, and node operators, report digital asset transactions exceeding $10,000 to the Internal Revenue Service (IRS).
The U.S. legislators claim that the law has an “overly broad interpretation” of what broker is. This places an undue load on individuals who might not have the information necessary to comply with the transaction requirements. Six of them said that Yellen has the authority to use the Administrative Procedure Act. This legislation governs how federal agencies can develop and issue regulations. They urged Yellen to create a set of rules that clarifies the definition of broker “in a prompt manner” or by the end of the calendar year.
The six senators asked that they carefully examine the technology driving this space. This could include differences in the consensus mechanisms for various distributed ledgers or second layer protocols. “Digital assets may be an impactful technological development in certain sectors. It will be important for those in the ecosystem to have clear guidelines regarding tax reporting requirements.
Related: US legislators introduce bill to “fix” crypto reporting requirement from infrastructure law
This letter represents the latest attempt by U.S. legislators to amend the tax reporting provision of the infrastructure legislation. Toomey and Lummis, Sinema. Portman, Warner and other senators supported a bipartisan agreement to amend the bill to do exactly that. However, the bill was stopped by Richard Shelby, an Alabama Senator, who wanted to add his amendment to the bill. Ron Wyden, Lummis and others tried to pass legislation that would have changed tax reporting requirements to “not affect individuals developing blockchain technology or wallets” the day after the bill became law.
The six senators stated that “now that this bill is law, Congress has the responsibility to ensure it is implemented effectively in accordance with congressional intention.”
Portman, Crapo and Toomey, Warner and Sinema added that they were ready to propose legislation to clarify the definitions of broker.