The U.S. Treasury Department and Internal Revenue Service plan to formulate guidelines detailing the reporting requirements of cryptocurrency brokers, escalating a Biden-era push to more closely scrutinize the space.
On Thursday, the department included the broker project in its annual “Priority Guidance Plan.” It is one of 193 projects now slated to receive additional resources through June 30, 2022.
The government mandate is reminiscent of last month’s infrastructure bill fracas that saw senators spar over the minutiae of crypto tech. Lawmakers’ failed effort to alter the bill’s definitions of a crypto broker put a national spotlight on the industry’s uneasy relationship with U.S. tax law.
However, the guidance plan, dated Sept. 9, is a separate effort from the congressional bill, on which the House of Representatives will vote at the end of the month.
Biden’s Treasury Department began campaigning for closer crypto monitoring months earlier. In late May, it rolled out a series of budget proposals that envisioned expanding crypto brokers’ information reporting requirements, a move it said would quash tax evasion.
The planned guidance is mum on specifics. It will apparently address “regulations regarding information reporting on virtual currency under § 6045.” That section of the U.S. Code deals with “Returns of brokers,” according to Cornell Law School.
The IRS deemed that issue a “tax administration” project. It also plans to issue “guidance concerning virtual currency” in an apparently separate effort in the “general tax issues” bucket.
“The published guidance process can be fully successful only if we have the benefit of the insight and experience of taxpayers and practitioners who must apply the rules,” the document said. “Therefore, we invite the public to continue to provide us with their comments and suggestions as we write guidance throughout the plan year.”
Bloomberg reported last month that the Treasury Department does not intend to broaden the definition of a broker beyond just trading platforms. However, tax experts told CoinDesk they were skeptical of this claim.
Nikhilesh De contributed reporting.
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