The United States House of Representatives passed the $1.2 trillion bipartisan infrastructure bill, which if signed into law by President Joe Biden, would enforce new provisions in relation to crypto-tax reporting for all citizens.
The infrastructure bill was first proposed by the Biden administration aimed at primarily improving the national transport network and internet coverage. However, the bill mandated stringent reporting requirements for the crypto community, mandating that digital asset transactions worth more than $10,000 are reported to the IRS.
As Cointelegraph reported, the bill was first approved by the Senate on Aug. 10 with a 69-30 vote, which was met with a proposal to compromise amendment by a group of six senators — Pat Toomey, Cynthia Lummis, Rob Portman, Mark Warner, Kyrsten Sinema and Ron Wyden. According to Toomey:
“This legislation imposes a badly flawed, and in some cases unworkable, cryptocurrency tax reporting mandate that threatens future technological innovation.”
Despite the lack of clarity in the bill’s verbatim, the infrastructure bill intends to treat the crypto community’s software developers, transaction validators and node operators similar to the brokers of the traditional institutions.
The House of Representatives passed the controversial infrastructure bill to President Biden after securing a win of 228-206 votes. In addition, the crypto community showed concerns over the vague description of the word ‘broker’ that may consequently impose unrealistic tax reporting requirements for sub-communities such as the miners.
this bill is unconstitutional and inherently anti-American
private citizens have the right to financial privacy and financial freedom
absolutely shameful to see this https://t.co/O9FkVC2CF4
— Meltem Demir◎rs (@Melt_Dem) November 4, 2021
As a repercussion, the inability to disclose crypto-related earnings will be treated as a tax violation and felony.
Legal experts recommended amendments to the infrastructure bill that considers failure to report digital asset transactions as a criminal offense.
Abraham Sutherland, a lecturer from University of Virginia School, cited concerns over the US government’s decision to blanket term crypto sub-communities as brokers:
“It’s bad for all users of digital assets, but it’s especially bad for decentralized finance. The statute would not ban DeFi outright. Instead, it imposes reporting requirements that, given the way DeFi works, would make it impossible to comply.”
Ray Schuetz received a Masters Degree in computer science from The University of Texas (Austin). Ray has been working as a full-time blockchain consultant for the past 3 years. In his spare time, Ray enjoys writing for EthereumCryptocurrency.com and other crypto news publications.