The Crypto Industry Goes To Washington And Comes Of Age
WASHINGTON - The U.S. Capitol in Washington, DC. Both houses of the U.S. Congress, the U.S. Senate ... [+] and the U.S. House of Representatives meet in the Capitol. (Photo by Stefan Zaklin/Getty Images)
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Cryptocurrencies, along with the regulatory vacuum they’ve created, have been on the radar of policymakers and tax authorities for years. The $1 trillion bipartisan Infrastructure Bill has brought crypto tax reporting back into focus. Legislators added new reporting requirements for crypto brokers to help pay for the Infrastructure Bill. The stricter tax rules on crypto transactions are forecast to generate about $28 billion in revenue that would go towards infrastructure development.
The crypto industry, however, isn’t happy - the reporting requirements appear hastily written and not well thought through. Section 80603 of the Infrastructure Bill has a broad definition of a ‘broker’ that encompasses not just brokers but also non-broker individuals and entities such as miners, validators, nodes, and non-custodial software developers.
The provision brings under the financial reporting requirements a swath of stakeholders, rather than just centralized custodial exchanges, who don’t have access to the reportable information in the first place. First is the broker reporting provision, which would require brokers (as expanded by the bill) to report transactions of their customers on a form similar to 1099-B. Second is expanding current law cash reporting on form 8300 to digital assets - this is