A bipartisan group of U.S. lawmakers wants to ensure that the definition of a crypto "broker" for tax reporting purposes is not too broad.
Supported by Senators Pat Toomey (R-Pa.), Mark Warner (D-Va.), Cynthia Lummis (R-Wyo.), Kyrsten Sinema (D-Ariz.) and Rob Portman (R-Ohio), the bill would exclude miners or other node operators and wallet manufacturers from the definition of a "broker" in a 2021 infrastructure law that imposed new tax reporting requirements on those facilitating crypto transactions.
According to a press release, the bill is identical to a proposed amendment that the group submitted last year, when the Infrastructure Investment and Jobs Act was being considered by the Senate.
The law proposed enforcing stricter tax reporting requirements on brokers facilitating crypto transactions. However, lawmakers and crypto industry advocates alike warned that the language might be overly broad, and could inadvertently enforce these same requirements on individuals, miners and wallet manufacturers who would not be able to record or report the kind of information that brokers could.
"Nothing in this section or the amendments made by this section shall be construed to create any inference that a person described ... includes any person solely engaged in the business of (A) validating distributed ledger transactions, without providing other functions or services, or (B) selling hardware or software for which the sole function is to permit persons to control private keys which are used for accessing digital assets on a distributed ledger," the text of the new bill said.
The U.S. Senate did not vote on the then Wyden-Toomey-Lummis amendment. The lawmakers instead sought unanimous consent to approve the amendment, as Senate Majority Leader Chuck Schumer (D-N.Y.) had closed the ordinary process to hasten the overall bill's passage. However, Sen. Richard Shelby (R-Ala.) blocked unanimous consent over an unrelated military spending amendment.
The Treasury Department has signaled that miners may already be excluded from the tax reporting requirements. In a letter sent to multiple lawmakers, the department said the reporting requirements would only apply to parties that already have access to the transaction information that would need to be reported.
CORRECTION (Aug. 3, 2022, 20:15 UTC): Corrects that the same group of lawmakers introduced the bill as an amendment in 2021.
CoinDesk is an award-winning media outlet that covers the cryptocurrency industry. Its journalists abide by a strict set of editorial policies. In November 2023, CoinDesk was acquired by the Bullish group, owner of Bullish, a regulated, digital assets exchange. The Bullish group is majority-owned by Block.one; both companies have interests in a variety of blockchain and digital asset businesses and significant holdings of digital assets, including bitcoin. CoinDesk operates as an independent subsidiary with an editorial committee to protect journalistic independence. CoinDesk offers all employees above a certain salary threshold, including journalists, stock options in the Bullish group as part of their compensation.