The Infrastructure Bill and Its Impact on Cryptocurrencies
The United States Senate’s bipartisan infrastructure bill, negotiated in principle with President Biden, provides for revenue offsets as projected by the Joint Committee on Taxation to the tune of $28 billion in cryptocurrency tax enforcement collections. To help finance legislative initiatives, lawmakers are looking at enhancing IRS information reporting requirements with respect to digital assets, including cryptocurrency.
The summary of the provision includes revising the definition of “broker” to include trading platforms pertaining to the trading of digital assets as well as making clear that broker-to-broker reporting within the meaning of Section 6045(g)(3) of the Code applies to digital assets. Lastly, the bill would provide that businesses should report cash payments in excess of $10,000 with respect to receipt of digital assets. While the text of the legislation is not currently available, and a vote in the U.S. Senate has not taken place, the above salient points are said to be tabled and discussed in a summary draft entitled, “Bipartisan Infrastructure Investment and Jobs Act.”
The impact of these provisions will place enormous reporting requirements on cryptocurrency investors, broker-dealers and consumers that use cryptocurrencies for the exchange of goods or other form(s) of payment.
Buchanan’s tax and government relations teams are monitoring these provisions closely and will provide you with updates as the legislative process becomes clearer.