Submitted by Bitcoin Magazine
A bipartisan team of U.S. senators is introducing a bill to restrict tax reporting rules present in the infrastructure bill, which is set to become law today.
The infrastructure bill’s text extends cash-focused section 6050I to contemplate cryptocurrency transactions.
“The new bill includes a provision that would make it retroactive to the infrastructure bill’s signing,” Bloomberg reported.
U.S. senators Ron Wyden, chairman of the Senate Finance Committee, and Cynthia Lummis are introducing a bill to amend tax reporting requirements in the infrastructure legislation set to become law on November 15, Bloomberg reported.
“The new bill, the text of which was obtained by Bloomberg News, seeks to override a provision in the infrastructure legislation that cryptocurrency investors say is overly broad and would stifle growth of digital currencies,” per the report.
In September, a tax change introduced in the infrastructure bill would require U.S. persons receiving over $10,000 in bitcoin and cryptocurrency to report the sender’s personal information to the Internal Revenue Service (IRS), extending the provisions of section 6050I that currently only apply to cash transactions.
“Our bill makes clear that the new reporting requirements do not apply to individuals developing blockchain technology and wallets,” Wyden said in a statement, per the report.
“This will protect American innovation while at the same time ensuring those who buy and sell cryptocurrency pay the taxes they already owe.”
The new bill seeks to restrict the interpretation of the entities these requirements would apply to and protect innovators such as miners and developers in the U.S.
“It’s not yet clear when the crypto reporting bill could come up for a vote, or if it could be included in other year-end legislative packages in coming weeks. The bill includes a provision that would make it retroactive to the infrastructure bill’s signing,” per the report.
As Decrypt notes, unlike many bills, which are floated without any real hope of passing, this one has the potential to become law. Sen. Wyden chairs the Senate Finance Committee, providing the bill with a track to the full floor. Moreover, the senators previously worked together to amend the existing infrastructure bill along similar lines, only to be stymied late in the game when a single senator, Richard Shelby (R-AL), voted against the amendment.
We need to be fostering innovation, not stifling it, if we are going to maintain America’s position as the global financial leader. https://t.co/px84GKbA4x— Senator Cynthia Lummis (@SenLummis) November 15, 2021
Senator Wyden has frequently sponsored or supported bills that would block the government from mandating backdoors for encryption protocols, weaken privacy protections in the Fourth Amendment, or allow for increased electronic surveillance of American citizens.
Senator Lummis, though more conservative on financial matters than Wyden, is more or less aligned with him on matters of Bitcoin as it relates to personal privacy. The freshman senator bought her first Bitcoin in 2013, stating later, "I believe in the economic power of scarcity and the potential for bitcoin to address some of the manipulations in our financial system."