US Treasury Aims To Quell Fears On Crypto Tax Rules

US Treasury Department is set to clarify that only cryptocurrency companies it considers brokers will need to comply with IRS reporting requirements.

The US Treasury Department is set to clarify that only cryptocurrency companies it considers brokers will need to comply with proposed IRS reporting requirements, aiming to quell concerns over a provision in the bipartisan infrastructure bill passed by the Senate. Other firms key to the nearly $2 trillion crypto market - from developers and miners to hardware and software providers - won't have any new requirements, so long as they don't also act as brokers, according to a Treasury official. The Treasury's guidance won't grant 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, the official said on condition of anonymity to discuss internal deliberations. The guidance, which could be made public as soon as next week, is an attempt to address concerns in the cryptocurrency industry that the $550 billion infrastructure bill would require a host of companies with ties to digital assets to report data to the Internal Revenue Service that they don't have. The tax provision, estimated to raise $28 billion over a decade, was included in the legislation as a way to help pay for new investments in roads and bridges. The Treasury's directive is crucial because lawmakers who want to revise the bill's language in the House are unlikely to succeed, since altering the crypto section could open up the whole legislation to additional revisions. House Speaker Nancy Pelosi has said she'll bring up the bill for a vote when President Joe Biden's $3.5 trillion social spending and tax plan is also ready for consideration, which could be months from now.