Senators seek crypto reporting amendment as Biden signs infrastructure bill

• The new bill would amend digital asset changes in infrastructure measure

• The legislation seeks to narrow taxation rules for crypto miners and brokers

A bipartisan group of U.S. senators is proposing a bill to narrow down tax reporting rules for digital currencies seeking to overrule a provision in the infrastructure bill that investors say is overly broad and would stifle the growth of cryptocurrencies.

The new legislation will force some crypto firms that provide a service “effectuating” the transfer of digital assets to report information on their users — as some other financial firms are required to do — to enforce tax compliance, Bloomberg News reported.

Democratic Senator Ron Wyden from Oregon, who is also the Chairman of the Senate Finance Committee and Republican Senator Cynthia Lummis from Wyoming, is introducing the bill that would address new tax-reporting requirements for cryptocurrencies that were laid out in the $550 billion new federal spending bill that President Joe Biden is scheduled to sign into law Monday.

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“Our bill makes clear that the new reporting requirements do not apply to individuals developing blockchain technology and wallets,” Wyden said. “This will protect American innovation while at the same time ensuring those who buy and sell cryptocurrency pay the taxes they already owe.”

Earlier setback

The standalone bill comes after the cryptocurrency industry voiced concerns during the infrastructure negotiations in the Senate.

The industry advocates said they’re worried that the language in the public-works bill would require miners and software developers to report tax data to the IRS that they can’t access.

“Digital assets are here to stay in our financial system, and the decisions we make now will have impacts far into the future,” Lummis said. “We need to be fostering innovation, not stifling it.”

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While it’s unclear when the reporting bill could come up for a vote or if it could be included in other year-end legislative packages in the coming weeks, Bloomberg News reported that the new legislation contains a retroactive provision to the infrastructure bill’s signing.

The taxation law for digital assets was included in the infrastructure bill to offset some of the cost of the $550 billion in new spending as the Joint Committee on Taxation estimated that it would raise about $28 billion over a decade.

Picture Credit: Bitcoin News