The controversial $1 trillion infrastructure bill will be voted on in the US House of Representatives on 27 September, but there will be no changes to the cryptocurrency tax provisions.
The House narrowly passed the Democrats’ proposed $3.5 trillion budget framework by a vote of 220 to 212. Despite initial opposition from some moderate Democrats, dissenting voters were swayed after House Speaker Nancy Pelosi promised to pass the bill by 27 September. pelosi said.
“I am committed to passing a bipartisan infrastructure bill by September 27th. I did this to get House Democrats to support the bill’s passage.”
In late July, the infrastructure bill included a last-minute cryptocurrency provision designed to raise a further $28 billion by expanding the crypto industry’s tax obligations.
However, the loose language included in the bill caused an uproar across the crypto community, with analysts arguing that it would impose strict third-party reporting requirements on network validators and software developers who would be unable to meet their newly mandated obligations.
The Senate appeared poised to pass a compromise amendment to the bill in early August that would have explicitly exempted network validators and software developers, but the bill ultimately passed Congress unamended due to the opposition of one senator.
However, a US Treasury official tried to give the crypto industry a glimmer of hope, telling CNBC that the reporting requirements would not be imposed on entities unable to comply.
The unnamed official said that the Treasury Department intends to conduct a detailed study to see which players in the crypto space could comply with the new reporting requirements.
However, the official’s comments were not comforted by Coin Center’s executive director Jerry Brito, who stressed that the current wording of the bill requires reporting of transfers and transactions. Brito also stressed that any cryptocurrency transaction worth more than $10,000 would need to be reported to the IRS along with the personal information of the counterparty to the transaction.
He added: “I understand that the Treasury Department seems intent on correcting this …… but please don’t accept that those in the crypto space are overreacting to this requirement.”
Commenting on the lack of amendments to the infrastructure bill, Kristin Smith, executive director of the Blockchain Association, said the incident was “unfortunate, but not surprising”.
“However, this is not the end of the process,” she said, adding.
“The Blockchain Association, our 46 member companies and the newly formed national crypto community will once again invest their energy in supporting technology-neutral, pro-cryptocurrency legislation and regulations – on this specific tax issue as well as on broader crypto policy.”
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