Following the final enactment of the infrastructure law, Senators Ron Wyden and Cynthia Lummis have presented a legislative proposal to protect the crypto industry from the controversial tax provision.
US President Joe Biden signed into law the $ 1 trillion bipartisan infrastructure law on Monday, which contains a controversial tax reporting requirement for cryptocurrencies.
Biden’s signing comes after the US House of Representatives approved the bill last week. As we have reported in DailyBitcoin, the new legislation is part of an extensive financing plan that will allocate funds to improve the public transportation system, extend broadband, as well as invest in other public services and construction projects.
“We are finally making it”Biden commented during the event, referring to years of failed attempts in Washington to approve a project of this magnitude. “So my message to the American people is this: America is moving again and your life is going to change for the better.”Added the president.
Infrastructure law includes controversial crypto provision
Likewise, the law also aims to raise USD $ 28 billion in crypto taxes to finance infrastructure projects across the country through a expansion of tax requirements for digital currencies. In particular, the regulation expands the definition of ‘broker’ for purposes of the Internal Revenue Service, requiring them to report all crypto transactions.
The provision has been widely controversial, raising concerns among the crypto enthusiast community as the language of the document has been unclear. The experts have pointed out that, as expressed in the legislation, the concept of ‘broker’ could encompass miners, wallet developers, node operators and other parties that do not actually facilitate transactions and who therefore could not submit tax reports in accordance with the law.
Meanwhile, another controversial provision for the crypto industry requires recipients of transactions of more than $ 10,000 to verify the sender’s personal information. Also provide other information such as Social Security number, indicate the nature of the transaction, as well as report it to the government within 15 days.
Some lawyers have ensured that when applied to cryptocurrencies and other digital assets such as tokens non-expendable (NFT), it would be almost impossible to comply with the law, as reported CoinDesk citing one recent research.
In response to the final enactment of the infrastructure law, a group of US lawmakers have come up with a proposal that seeks to protect the crypto industry.
Senators seek to shorten the scope of ‘corridor’
As reported Bloomberg, Senators Ron Wyden, chairman of the Senate Finance Committee, and Cynthia Lummis, a spirited advocate for cryptocurrencies, are presenting a bill to amend the controversial provision of tax declaration requirements in the infrastructure law.
According to the report, the legislative proposal seeks to reduce the scope of the term ‘corridor’, which could be interpreted too broadly according to experts, to the point that it could stifle innovation and growth in the crypto industry. Senator Wyden explained about it in a statement cited by Bloomberg:
Our bill makes clear that the new reporting requirements do not apply to people who develop wallets and Blockchain technology. This will protect American innovation while ensuring that those who buy and sell cryptocurrencies pay the taxes they already owe.
This is not the first attempt by lawmakers – and the crypto community – to amend the controversial provision. In August, two groups of senators came together to introduce an amendment that would shorten the scope of the term ‘corridor’. However, the proposal failed to secure a unanimous decision from the Senate and the infrastructure bill passed unreformed to the House of Representatives.
In accordance with Bloomberg, still unclear when the bill to reform the crypto reporting provision could be put to a vote, or whether it could be included in other year-end legislative packages in the coming weeks. Although, it highlights that the proposed amendment includes a provision that would make it retroactive to the signing of the infrastructure bill.
Hannah Estefanía Pérez’s version / DailyBitcoin
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