House sends infrastructure bill with crypto tax provision to U.S. president.
The U.S. House of Representatives voted to pass a bipartisan infrastructure bill that contains a controversial cryptocurrency tax reporting requirement. Late Friday night, the House voted in favor of the bill with at least 218 ayes, fulfilling a key priority for the Biden administration amid controversy over whether an accompanying Democrat-led bill would also move forward. The Senate initially passed the bill in august after lawmakers shot down any attempts at amending the crypto provision. The bill has now been passed to President Joe Biden for his signature.
The crypto industry was concerned about a tax reporting requirement within the bill that sought to expand the definition of a broker for IRS purposes. The reporting requirement would see all brokers report transactions under the current tax code. Industry proponents worried that the meaning would be too broad, capturing entities like miners and other parties that don’t facilitate transactions. The bill also includes a provision to amend tax code section 6050I, which has stoked fear in the crypto industry. Unlike other tax code violations, violations of 6050I are a felony, and some lawyers have pointed out that, applied to cryptocurrencies and other digital assets like non-fungible tokens (NFTs), the law could be nearly impossible to comply with. Pushback against the provision held up the bill’s passage in the Senate, where the infrastructure bill originated, giving the industry a chance to push for an amendment to modify the language. However, the Senate passed the bill without adopting any amendments, despite an 11th-hour effort to secure a change.