New House Financial Services Committee Chairman Asks Secretary Yellen to Delay Crypto Tax Provision

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Top Republican on House Financial Services Committee Wants US Treasury Department to Delay Implementation of Crypto Tax Provisions in Last Year’s Infrastructure Investment and Jobs Act Until that there is more clarity on who is covered by the bill.

Rep. Patrick McHenry (RN.C.), the current ranking member but who will chair when Republicans take control of the U.S. House of Representatives in the new Congress next month, Treasury Secretary Janet Yellen wrote. saying the provision should not be implemented until taxpayers know who will have to meet its requirements.

The problem is the definition of a “broker” for tax reporting purposes. When legislation then known as the Bipartisan Infrastructure Bill was introduced last year, industry participants warned that the definition of a “broker” was too broad and could force entities such as miners and crypto wallet makers to comply with tax reporting rules that they would not physically comply with. to be able to meet.

“A number of questions and concerns remain unanswered regarding the scope of Section 80603,” McHenry wrote. “These questions and concerns need to be addressed to ensure taxpayers have clear direction on upcoming requirements and the required date for compliance,” he continued in the letter dated December 14. “Section 80603 is poorly drafted. As such, it could be misconstrued as expanding the definition of a broker beyond custodial digital asset intermediaries.”

The Treasury Department hasn’t issued official guidance regarding the provision, but has said in letters to lawmakers that it won’t include certain groups, such as minors, in the definition of “broker.”

“Treasury’s acknowledgment that ancillary parties who cannot access information useful to the IRS are not intended to be captured by broker-dealer reporting requirements is a positive step,” McHenry’s letter said, making reference to the Internal Revenue Service. “This is also consistent with the policies outlined in HR 6006, Keep Innovation in America Act, which I introduced last year.”

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A Treasury spokesman did not immediately return a request for comment.

The letter also challenges another provision, which would incorporate crypto into the Treasury’s definition of “cash,” which in turn would impose new reporting requirements on all U.S. taxpayers who receive more than $10,000 in cryptocurrency. These requirements would include senders’ personal information, including social security numbers.

Industry group Coin Center sued the Treasury Department earlier this year over the provision, calling it “unconstitutional.”

“The 6050i reporting requirements put Americans’ privacy at risk, without a full analysis of the impact of such a change,” McHenry’s letter said.

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