After two months of progress, Congress finally approved the controversial $1.2 Trillion Infrastructure Bill by 228-206 votes, opening the door for taxation requirements on cryptocurrencies in the US.
The bill has been at the top of Biden’s agenda for months. The next stop of the bill in question will be the White House. The bill will be submitted for Biden’s signature to become law. If approved here as well, crypto service providers like Coinbase will need to fill out a 1099 form describing their customers’ names and addresses and report their income directly to the Internal Revenue Service (IRS).
Various proposals have been made from lawmakers, such as Senator Ted Cruz, to make the provision more specific or to remove the addition altogether, but these supporters have not been successful. Senator Pat Toomey commented, “This law imposes tax filing obligations that are so flawed and often useless that they threaten future technological innovation.”
There’s Still a Light of Hope
Despite Saturday’s vote, CoinCenter’s Jerry Brito is still committed to making improvements to its crypto reporting requirements. “Despite our best efforts, the infrastructure package has passed with terrible crypto tax reporting provisions,” he said, adding, “But the fight is not over yet. We have several ways to continue to pursue a correction.”
He told supporters that the crypto provisions won’t come into effect until January 2024, which gives them some time to roll back this law before it affects anyone.
He also noted that the Senate will now need to work on a second “big spending bill” that could see the finalization of the added crypto reporting requirement. The crypto community can take this chance for changes. “As Chairman of the Finance Committee, we are fortunate that Senator Wyden will be key to this bill”.
He also added that they are working with various members of congress to introduce independent bills that attempt to separately address crypto tax reporting provisions, but cautioned that it may take two years or more to pass.
As for some issues, such as the 6050I individual reporting requirement, Brito argues this is unconstitutional and they will appeal in court if not fixed by later legislation. For crypto advocates, the time between now and when the law goes into effect could be a breaking moment for the crypto industry.