The United States Treasury Department is looking to clarify about brokers’ tax reporting requirements in the bipartisan infrastructure bill passed by the Senate. It will end concerns over a provision in the bill.
According to the report, the treasury department is designing the guidelines for cryptocurrency companies it considers brokers to comply with the proposed IRS reporting requirements. The guidance could be made public as soon as next week.
Guidelines will address concerns in the cryptocurrency industry to report data to the IRS for a $550 billion infrastructure bill. According to officials, developers, miners, hardware, and software providers won’t have any new requirements, unless they act as a broker.
“The Treasury’s guidance won’t give blanket exemptions based on how firms identify themselves and instead will focus on whether a firm’s activities qualify it as a broker under the tax code,” according to the report.
House Speaker Nancy Pelosi has said, “She will bring the bill to a vote when President Joe Biden’s $3.5 trillion social spending and tax plan is also ready for consideration”. The Senate passed bill has caused significant outrage in the cryptocurrency world, with participants saying congress does not understand technology.
The proposed law would expand the definition of broker in tax code to include any who “regulatory provide any service affecting the transfer of digital assets.”
The treasury official said some industry’s concerns were legitimate and Treasury authority to collect legitimate tax information. The official said the department is not thinking of businesses that do not have transaction data. Various companies are ultimately affected by new reporting rules, and it also depends on how aggressively IRS applies Treasury guidance.
IRS Commissioner Chuck Ratting has said that “tax evasion through the use of virtual currency is a significant contributor to the growing gap between taxes owed and what the IRS actually collects.”
The new reporting rules, if signed into law, won’t go into effect until 2023. The government and crypto companies will have time to update their system to send data prescribed in law.
Furthermore, more regulation is likely to come for the cryptocurrency community, with prominent lawmakers including Senator Elizabeth and regulators like SEC.
