Cryptocurrency advocates and some U.S. policymakers have urged for an amendment to the cryptocurrency tax reporting provision in the $1 trillion infrastructure bill.
The provision would require each “broker” to report their cryptocurrency gains in a type of 1099 form. But, critics worry that as written, the provision’s definition of a “broker” is too broad. Cryptocurrency advocates are concerned that the current language could potentially target those without customers who therefore wouldn’t have access to the information needed to comply.
These fears, however, are unwarranted, according to a Treasury official.
The U.S. Treasury Department will not target non-brokers, such as miners, hardware developers and others, even if the provision isn’t amended, a Treasury official tells CNBC Make It.
Reporting requirements would only be extended to those able to comply, like certain decentralized exchanges, for example, if written into tax law.
But, prior to establishing the law, the Treasury plans to take time to undergo research to understand who might be asked to comply and verify whether they’d be capable of doing so, according to the Treasury official. This process could take years.
This is why investors shouldn’t be worried, as Anjali Jariwala, certified financial planner, certified public accountant and founder of Fit Advisors, previously told CNBC Make It.
The provision in this bill is more to establish intent, rather than lay out specific rules. “This bill will probably be the first step of further regulation of cryptocurrency,” Jariwala said.
Though many within the cryptocurrency space may struggle to take the word of the Treasury, the department is clear that it has no intention to target non-brokers.
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