Yesterday President Biden finally signed into law the Senate Bipartisan Infrastructure Bill that had been passed by the House a week and a half earlier. This $1 trillion dollar deal covers a lot more then what is typically covered in infrastructure and has lead to plenty of complaints and jokes about how just about anything could be considered infrastructure under the new umbrella term used. While it had the ability to drive up crypto prices due to inflation fears that have been materializing as we speak but there was also a direct issue for crypto.
Within the infrastructure bill as a way to help pay for it a tax reporting requirement was changed that made the definition a heck of a lot broader then it used to be. When this was recognized some Senators tried to address it but the efforts failed before the Bill was passed and sent to the House where it sat for a couple of months. The bill required all brokers to report transaction under the tax code and the worry was that miners and other parties who do not actually facilitate transactions would end up getting caught up in reporting.
That was not the only issue though another provision requires the recipient of a transaction over $10,000 to collect and report all sorts of information about the sender to the Federal Government and this had to be done within 15 days of the transaction. Upon further scrutiny though some law experts have said that with the wording the $10,000 requirement does not have to actually be that amount in crypto. Rather it could be the value of the NFT that is sold. I do not know about you but imagine buying something from OpenSea and then trying to find out all of the information the IRS will want about who sold it to you or paid for it.
Average citizens or those that became involved with an NFT at an early stage before they blew up in value would essentially be punished by this rule. Today though Texas Republican Senator Ted Cruz who has emerged as a huge proponent of crypto currency introduced legislation to fix these issues in the infrastructure bill. His bill would straight up repeal all crypto related provisions in the bill thus eliminating one of the "pay-for" provisions in the bill.
Now this is not the only legislation introduced today to fix this issue as a bipartisan bill was filed today with two Senators who have been trying to fix this issue since it arose. Democratic Senator Ron Wyden a huge privacy hawk and Republican Bitcoin champion Cynthia Lummins proposed a bill that was much more targeted in fixing the issue. Their bill clarifies who is in charge of reporting data and specifically address that miners, stakers, wallet providers and developers would be exempt from this. These are the very groups that could be targeted by the IRS as the bill stands while the transaction reporting and information that would be gathered is still a hypothetical that is a huge stretch to be enforced.
With this issue having bipartisan support it should be something that will be easily addressed. Both sides of the aisle have seen the growth in the industry and have agreed that it would be detrimental to squash the industry if they even really could do it which is another thing that politicians have brought up. Hopefully this is something that they get moving on before it becomes an issue as right now it is not a problem but could be next year when the IRS starts issuing its new rules.
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