On Friday, Congress passed the $1.2 trillion infrastructure package, sending the legislation to President Joe Biden for his signature. Along with it also maintains a new cryptocurrency tax reporting requirement that the Treasury Department could apply to miners.
Biden’s Infrastructure Investment and Jobs Act requires brokers to report trader information on transactions of more than $10,000 to the IRS. The provision was added to the Senate version of the bill in late July after the Joint Committee on Taxation estimated that it would offset $28 billion of infrastructure costs over the next decade.
But the cryptocurrency community is more concerned about how the bill defines a broker more than the new tax requirements it imposes on them. Industry groups and think tanks, like the Chamber of Digital Commerce and Coin Center, have argued that the bill’s current language is too broad and vague and could impose these reporting requirements to miners and wallet developers, not just brokers like Coinbase.
Senators that are sympathetic to the cryptocurrency industry, like Sens. Ron Wyden (D-OR) and Cynthia Lummis (R-WY), tried to remedy the problem over the summer before the Senate passed the bill, joining with Sen. Pat Toomey (R-PA) for an amendment clarifying the role of brokers in the legislation.
But the amendment was shot down when Sen. Richard Shelby (R-AL) objected to a unanimous motion to approve it in August. Shelby previously chaired the Senate Banking Committee.
Shortly after the Senate’s passage of the bill, the bipartisan Blockchain Caucus sent a letter to every House lawmaker calling on them to help fix the crypto pay-for.
The lawmakers wrote in the August letter: “Cryptocurrency tax reporting is important, but it must be done correctly. When the Infrastructure Investment and Jobs Act comes to the House, we must prioritize amending this language to clearly exempt noncustodial blockchain intermediaries and ensure that civil liberties are protected.”
Despite any efforts to change the language in the House, the problematic broker definition remains in the final bill. Once Biden signs the legislation, the Treasury Department will have the sole authority to decide what entities would be considered brokers.
Aside from the cryptocurrency reporting rules, the infrastructure package includes billions of dollars to improve roads, bridges, and other physical infrastructure across the country. The measure includes $65 billion to connect every American household to high-speed broadband over the next 10 years. There’s also $7.5 billion to build over half a million EV charging stations.
