Two Crypto Tax Amendments Go Head-to-Head
2 min read
The conflict between two infrastructure bill amendments — which involve the tax rules of cryptocurrency — is now a cause for concern within the crypto community.
The legislators originally proposed to implement stricter rules on the taxation of digital assets in order to fund the $1 trillion bipartisan infrastructure bill.
In addition to the existing law that requires brokers to report transactions of over $10,000 to the IRS, brokers will also have to report gains in a type of 1099 form.
However, the reception towards the provision was negative as crypto supporters began to ask the legislators to define “broker” more clearly. As of now, the bill defines a broker as those who regularly provide any service that processes the transactions of digital assets for someone else.
The initial amendment proposed by Wyden, Toomey & Lummis
Senator Wyden, Toomey and Lummis submitted the first amendment on Wednesday in order to narrow down the definition of “broker”.
Miners and validators, hardware and software developers, and protocol developers are specifically excluded from the definition of a broker in this amendment.
The competing amendment proposed by Portman, Warner & Sinema
Senator Portman, Warner and Sinema proposed their amendment to the infrastructure bill on Thursday. Although it has received formal support from the White House, crypto supporters are highly critical towards it — calling it “unworkable”.
This amendment excludes proof-of-work (POW) miners and sellers of hardware and software wallets, while subjecting crypto developers and proof-of-stake validators to the law.
What to look forward to
Once the Senate resumes, the legislators will vote on the amendments and the overall infrastructure bill.
Should the bill pass, the House will be voting on it next. Any provisions are subject to changes in the future, including the ones related to crypto tax.
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