Wyden wants tweaks to infrastructure bill’s cryptocurrency rules

Leading Republican Infrastructure Deal negotiator, Senator Rob Portman of Ohio, said in recent months that he is drafting a bill to increase reporting on transactions in digital assets like Bitcoin and Ethereum and better define the area for tax purposes. Portman described the interest in closing the “tax gap,” the gap between taxes owed to the government and paid to the government that the Democrats seek as a source of income.

The Biden government has pushed for several measures to address the tax gap, which Internal Revenue Service Commissioner Charles P. Rettig estimates could reach as high as $ 1 trillion each year, including unpaid taxes on cryptocurrencies. Treasury’s tax proposals this year included cryptocurrency-related reporting, similar to what was done in the Infrastructure Act, as well as general funding for the IRS to bolster enforcement.

Senators considered funding the IRS on the bipartisan deal, but it was scrapped after Republicans became bitter with the idea. Crypto regulations emerged as a way to offset $ 28 billion of the package’s new $ 550 billion spend on roads, highways, bridges, and other infrastructure projects when Senators struck a deal last week.

The final bill would require business transactions in excess of $ 10,000 in cryptocurrency to be reported to the IRS, adding digital coins to mandates that already exist for large cash payments.

It would include companies that facilitate digital coin trading in the definition of “brokers” who are required to report information to the IRS. That’s the part of the proposal that generated the most setback as industry groups said they would ask some intermediaries for information they don’t have and risk getting the cryptocurrency industry to leave the United States.