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Future Financial Committee Chair Requests Yellen To Postpone Crypto Tax Provisions

In a letter, top Republican, Rep. Patrick Mchenry, wants the U.S. Treasury department and Janet Yellen to delay the implementation of cryptocurrency tax provisions in the Infrastructure Investment and Jobs Act.

Rep. Patrick McHenry insists that the provision shouldn’t be implemented until taxpayers gain further clarity on how they can meet its requirements. McHenry has raised concerns about multiple points within the provision, starting with the debate over the definition of a “broker” for tax reporting purposes.  He argues the definition is too broad and can include miners and crypto wallet manufacturers, forcing them to adhere to tax reporting rules they  physically cannot fulfill.  

He points out that a number of questions and concerns about the scope of the provision, known as Section 80603, remain unanswered, and that it is poorly drafted and could be wrongly interpreted as expanding the definition of a “broker” beyond custodial digital asset intermediaries.

McHenry also points out that a separate provision in the act would grandfather cryptocurrency under the Treasury’s definition of “cash.” The change would impose reporting requirements on US taxpayers who receive over $10,000 in cryptocurrency, such as: provision of the sender’s personal information, including Social Security numbers. In fact, a reputed crypto industry group, Coin Center, has  previously sued the Treasury Department over this provision, calling it “unconstitutional.” 

McHenry’s letter also argues that “A number of questions and concerns remain unanswered regarding the scope of Section 80603.” And that the provision is “poorly drafted.”  Moreso, McHerny states that reporting requirements under section 6050i “jeopardize the privacy of Americans, without a comprehensive analysis of the impact of such change.”

The Treasury Department has not yet issued formal guidance on these provisions, but has previously indicated in letters to lawmakers that it does not intend to include miners and other groups in the definition of “broker.” McHenry’s letter welcomes this acknowledgement, saying it is consistent with the policies outlined in H.R. 6006, also known as  the Keep Innovation in America Act (KIAA), which he introduced last year. He calls on the Treasury Department to provide clearer guidance on the forthcoming requirements and the date for compliance, so that taxpayers have a better understanding of the provisions and who is covered by them. A spokesperson for the Treasury Department did not immediately respond to a request for comment.

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