Treasury Seeking More Crypto Reporting Requirements, Global Data-Sharing, in Reconciliation Package
The Treasury Department is looking to add more crypto reporting requirements in the reconciliation bill.
On the one hand, the Treasury wants to introduce more rules for cryptocurrency transaction reporting; on the other hand, the officials of the department have been telling media that the crypto community’s fear about tax provision in the $1 trillion infrastructure bill is unwarranted and that they would clarify that ‘broker’ does not cover those who don’t have transaction data.
The new proposed crypto reporting rules led to a showdown in the Senate as the crypto industry challenged the overreaching definition of ‘broker’ in the bill that covers even those who don't have any data to report, such as miners and stakers, and developers.
However, the amendment to the bill couldn't pass, and the original bill is now in the House, which adopted a rule to vote on the package next month that keeps it closed to amendments to avoid having to send it back through the Senate.
Crypto, however, does have allies in both the parties in the form of Senate Finance Chair Ron Wyden, D-Ore.; Senate Banking Ranking Member Patrick J. Toomey, R-Pa.; Sen. Cynthia Lummis and the House’s Blockchain Caucus, whose co-chairs include Rep. Tom Emmer, R-Minn.
Here's a chance to weigh in with ideas for clear crypto rules: https://t.co/a7BgVPn2xl
— Hester Peirce (@HesterPeirce) August 30, 2021
According to a report by Roll Call, the Biden administration is urging Democrats to include more rules for tax compliance on crypto transactions in the upcoming $3.5 trillion budget reconciliation package.
This addition would require crypto businesses to report information on foreign accounts holders so that the US can share the information with its global trading partners.
Cryptocurrency exchange FTX CEO Sam Bankman-Fried made the second-biggest contribution of $5.2 million to Biden's presidential campaign last year.
According to the Treasury, the growth of shell companies that US taxpayers set up overseas to avoid tax, including on crypto gains, needs stricter reporting measures.
In its “Greenbook,” the annual list of revenue proposals, the Treasury had noted that the “global nature” of crypto allows the taxpayers to conceal assets and taxable income and to combat this “third-party information reporting is critical to help identify taxpayers and bolster voluntary tax compliance.”
Crypto exchange Kraken CEO Jesse Powell doubted the legality of the latest move, saying, “Why don’t the foreign agencies just ask us for the info directly, as they have been for the last decade.” Jerry Brito, executive director of CoinCenter, said,
“We don’t object to crypto tax reporting requirements (indeed, we’ve asked for reporting guidance for years); we object to last-minute additions to “must-pass” bills outside regular order and with little or no public input.”