U.S. Treasury Department Set to Clarify Crypto Tax Rules in Infrastructure Bill

Jafrin  |  Aug 16, 2021

The United States Treasury Department is reportedly seeking to clarify the definition of brokers in the highly debated infrastructure bill that aims to raise $28 billion in cryptocurrency taxes. Reportedly, the guidance from the department is expected to be made public next week.

U.S. Treasury Department Set to Clarify Crypto Tax Rules within the Infrastructure Bill Next Week

According to Bloomberg, the Treasury Department is looking to clarify the definition of a broker that would be subjected to the new IRS reporting requirements.

Based on an anonymous treasury official, developers, miners, and wallet providers won’t be subjected to the new reporting requirements as long as they don’t act as they do not provide brokerage services.

“The Treasury’s guidance won’t grant blanket exemptions based on how firms identify themselves and instead focus on whether a firm’s activities qualify it as a broker under the tax code.”

This means the U.S. Treasury will not provide blanket exemptions based on how the digital asset companies identify themselves but will rather focus on whether the firm has conducted activity that qualifies as a broker under the tax code.

Currently, the anonymous official explained that the guidance is being discussed internally but could be made public next week.

Addressing the Growing Concerns of Crypto

The clarification is an attempt to address the growing concerns within the cryptocurrency community arising from the $550 billion infrastructure bill that would require crypto firms to report data to the IRS. Estimated to raise $28 billion over a decade, the tax provision was included in the legislation as a way to help pay for newer investments in infrastructure development.

Responding to this, Coinbase CEO Brian Armstrong has openly criticized the bill last week saying that the government is “trying to pick winners and losers in a nascent industry.” While Tesla and SpaceX CEO Elon Musk responded saying this was not the time to “pick technology winners or losers,” adding that the legislation was hasty.

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