Bipartisan 'Cryptocurrency Fairness Act' Moves to Congress

Authored by Jerry Brito via CoinCenter.org,

Bipartisan bill will make it much easier to use Bitcoin to pay for every day goods and services.

In April, Coin Center explained how the tax laws affecting digital currency transactions create serious friction for consumers and merchants and discourages the use of Bitcoin (or any cryptocurrency) as an everyday payment method.

We also outlined how Congress could address this problem. Since then we have been working with congressional staff to develop legislation that would address the problem, and today I’m thrilled that with the leadership of Rep. Jared Polis and Rep. David Schweikert, co-chairs of the Blockchain Caucus, the Cryptocurrency Tax Fairness Act has been introduced in Congress.

The bill does two things.

First, it creates a de minimis exemption for cryptocurrency transactions for goods or services.

Today, if you buy a cup of coffee with bitcoins, you’ll have to calculate and report any gains that you experienced and pay tax on any gains. Under the bill, any transaction under $600 would be completely exempt, so you’d neither have to worry about keeping track of gains on all the little purchases you make, nor would you owe taxes on those small gains. This mirrors the same kind of exemption that foreign currency enjoys today and we think it’s a simple and fair way to avoid discouraging the use of cryptocurrency.

Now, there are many other transactions above $600, such as getting in and out of investment positions, on which capital gains tax will be owed. Today, you are responsible for keeping track of and accurately reporting every cent of gain. This is in contrast to your stock broker, who provides you and the IRS with a 1099-B form accounting all your gains and losses. Indeed, in answering Coin Center’s amicus brief opposing the IRS’s unprecedented and overbroad John Doe summons against Coinbase users, the Department of Justice noted that, “If Congress had subjected bitcoin exchanges like Coinbase to similar reporting requirements as those imposed on an online stock broker or a barter exchange, no John Doe summons to Coinbase would likely have been necessary[.]”

We’re not sure if such informational reporting requires an act of Congress, or whether the IRS could have provided for it through rulemaking and has simply opted not to.

Whatever the case, the other thing the Cryptocurrency Tax Fairness Act would do is require the Treasury Department to issue guidelines for informational reporting on digital currency transactions for which capital gains is due.

A de minimis exemption that completely excludes all small transactions, as well as clear IRS guidance and informational reporting, would be a lifesaver at tax time for cryptocurrency users.

This is the first time a bill has been introduced in Congress to encourage cryptocurrency’s use and development and Coin Center is thrilled to be a part of it. Now the real work begins: getting it passed--and we’ll need your help!

Comments

nuubee Mon, 12/11/2017 - 15:32 Permalink

This is 5 years too late. typical politicians, behind the times.
Bitcoin's fees are so high right now, if you use Bitcoin to buy anything less than a Car, you're wasting money on fees.

Implied Violins hedgeless_horseman Mon, 12/11/2017 - 16:05 Permalink

Have you developed your own hard drives and BIOS chips, free of back doors?

https://tech.slashdot.org/story/17/11/07/1041236/minix-intels-hidden-in…

People buying into this crypto bullshit are completely delusional. Even *if* the fucking 'blockchain' isn't hackable (bullshit), everyone's hardware is rigged to allow entry by anyone with the proper codes.

How can people keep ignoring the elephant sending electrons right to their computer screens? Until hardware is developed that doesn't have these built-in back doors, there is no fucking way in hell I will ever seriously think about using cryptos.

In reply to by hedgeless_horseman

lil dirtball Implied Violins Mon, 12/11/2017 - 16:18 Permalink

All this tech - the PC, the internet, the smartphone, etc. - is all about surveillance. Now the currency is going to be digitally tracked as well.

Anyone who thinks the central banks didn't create the perpetual blockchain in collusion with governments in some Bilderberg backroom is completely delusional.

Unironically, ZH and her resident shills promote this hazard as the next greatest thing - ZH0mbies unwittingly lap it up like mana from the Sachs god and will happily take the chip when it's offered. For convenience. For compliance. For safety. Forever.

"Privacy is dead." - Mark Zuckerberg

In reply to by Implied Violins

Implied Violins lil dirtball Mon, 12/11/2017 - 16:30 Permalink

Preaching to a choir, here. I've already been a victim of this, being a whistleblower. I had a computer and a cell phone both give up the ghost on the same day I was preparing a Powerpoint presentation using data from our lab to send on to Dane Wigington when it happened (and in retrospect I'm glad I didn't as he is now a shill for the AGW scam). He related to me before that happened that he hadn't been getting e-mails I know I was sending him.

Since then I haven't even bothered to put Microsoft Office on my computer, because every time I try the hard drive fails. And this happened with two different computers.

This shit is IN PROGRESS, people. Anyone invested in crypto better be prepared to be ass-raped, because when the time comes, the .gov will take it ALL - or force us to use THEIR crypto and no other.

In reply to by lil dirtball

SixIsNinE Implied Violins Mon, 12/11/2017 - 17:00 Permalink

i was all psyched to get a new asus mobo maximus and get a fast 7700k chip - to learn that it ONLY take win10well, i have saved a load of articles on "fixing" win10 as best can be, so i'm gonna give it a shot. i don't think mac os is much better these days anyway.   i've loved win7 for 8 years Bitcoin up $17K - going to $30k at least for new years, BiaTTCheZZZZZZZZZZZZZZZZZZZZZZZ

In reply to by Implied Violins

monkeyshine hedgeless_horseman Mon, 12/11/2017 - 18:48 Permalink

I am no CPA or JD either but the IRS has the potential to make it nightmarish regardless of which crypto you use BTC LTC ETH etc.  It is not money so they could regard it as a security or investment.  For any business, cash accounting or even accrual accounting with cash is at least fairly straightforward if not well liked.  But if you were a business and accepted crypto as payment from customers and spent it for supplies and inventory etc it would potentially be a nightmare.  Since it is not cash if the IRS considered it a security, like stocks or bonds, you would need to track each coin you received, its value in dollars on the day you received it, what was bought with it and how much that item you sold cost you etc. This would be your profit on the sale of the item.  But, it is possible you could even owe tax on that difference before you could expense any additional costs from the transaction (which would not happen with cash).  Then as you spent some crypto your customers gave you to buy more supplies you need to track which coins you used, the value when you got them (after expensing, profit, tax & depreciation ) and what was the value of the items you traded them for?  How long did you hold the coins before you spent them because this would make a difference if you owed income tax rates or long term capital gains rates.  And again, since it is not cash, the items you traded the crypto to buy could be subject to depreciation before you could deduct the expense or cost of goods when you sold them to your customers later one for more crypto.   

In reply to by hedgeless_horseman