US senators eye cryptocurrency taxes to fund infrastructure plan, United States News & Top Stories

WASHINGTON (BLOOMBERG) – The Senate’s bipartisan infrastructure deal provides for stricter rules to be imposed on cryptocurrency investors to collect more taxes to fund part of the $ 550 billion ($ 746 billion) investment in transportation and energy systems .

According to a summary of the plan, the regulations would generate an additional $ 28 billion from cryptocurrency transactions. The proposal would impose more rules on crypto brokers to report transactions in digital assets, including virtual currency, to the Internal Revenue Service (IRS). In addition, companies would have to report crypto transactions of more than $ 10,000.

The cryptocurrency measures were short-term additions to the infrastructure deal announced on Wednesday (July 28) after weeks of haggling between Republicans and Democrats over what expenses to include in the deal and how to pay for it. For members of both parties, including President Joe Biden’s Treasury Department and Ohio Senator Rob Portman, the leading Republican in the infrastructure talks, tighter control of the cryptocurrency trade was a priority.

The Treasury Department said in a May report on tax enforcement proposals that additional measures are needed on crypto assets “to minimize the incentives and opportunity to shift revenue from the new information reporting system.” Cash transactions over $ 10,000 are already subject to IRS reporting.

Portman said that concerns about the transparency of the cryptocurrency have been growing in Congress for some time, and that’s why the measure was included in the deal. “Everyone’s been talking about how to provide more coverage in particular, and that’s leading to better compliance,” he told reporters on Wednesday evening.

The proposal comes as IRS enforcement officials say cryptocurrency is increasingly becoming an area for tax evaders to hide revenue from the federal government. The IRS added a line about cryptocurrency on Form 1040, the individual tax return, last year to give more insight into virtual currency transactions.

Some executives in the cryptocurrency industry reacted negatively to the proposal, saying that certain companies that appear to be under the provision are unable to gather the necessary information.

“It’s extremely problematic,” said Ms. Kristin Smith, executive director of the Blockchain Association, a Washington-based trading group, arguing that the provision could push some companies overseas. “We’re pushing every lever now to change it.”