What You Need to Know
- Some U.S. senators aim to narrow cryptocurrency tax reporting rules, which they see as overly broad and stifling to the growth of digital currencies.
A bipartisan team of U.S. senators is introducing a bill to narrow some cryptocurrency tax reporting rules that were laid out in the infrastructure legislation that’s set to become law on Monday.
[Editor's note: President Joe Biden signed the bill into law late Monday.]
The new bill, the text of which was obtained by Bloomberg News, seeks to override a provision in the infrastructure legislation that cryptocurrency investors say is overly broad and would stifle growth of digital currencies.
Senate Finance Committee Chairman Ron Wyden, an Oregon Democrat, and Senator Cynthia Lummis, a Wyoming Republican, wrote the tweak to the rules.
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“Our bill makes clear that the new reporting requirements do not apply to individuals developing blockchain technology and wallets,” Wyden said in a statement. “This will protect American innovation while at the same time ensuring those who buy and sell cryptocurrency pay the taxes they already owe.”
The legislation would address new tax-reporting requirements for digital currencies included in the $550 billion infrastructure bill that President Joe Biden is scheduled to sign into law Monday.
The new law will force some cryptocurrency companies that provide a service “effectuating” the transfer of digital assets to report information on their users — as some other financial firms are required to do — in an effort to enforce tax compliance.
The standalone bill comes after several attempts to address concerns voiced by the cryptocurrency industry during the infrastructure negotiations in the Senate.