Despite months of strong lobbying by business organizations seeking to avoid tougher regulatory control, Congress enacted a bipartisan $1.2 trillion infrastructure measure on Friday that contains a controversial new bitcoin tax requirement.
After months of painstaking negotiations, the House passed the infrastructure package late Friday night by a vote of 228-206, sending the bill to Biden’s desk for his signature. It is unknown when the president plans to sign the bill.
One of the bill’s primary income generators is an effort to combat cryptocurrency tax evasion by imposing a number of new tax reporting obligations on the business that relate to digital assets such as bitcoin and no fungible tokens, or NFTs.
Fed to increase taper bond purchases by $15 billion per month as it exits pandemic-era policy. According to third-party data, the tax gap the difference between what is owing and what is actually paid on bitcoin capital gains was around $11.5 billion in 2017. However, as the Tax Foundation pointed out in an August blog post, it is plausible to believe the gap has grown since then, considering the significant growth in crypt’s market capitalization.
One new provision in the plan would compel brokers to disclose digital asset transactions, such as bitcoin or ether, to the IRS in the form of a 1099 form. Customers’ names and addresses would also be required to be disclosed by brokers. However, cryptocurrency enthusiasts and other opponents have claimed that the bill’s definition of someone qualifies as a “broker” is too wide as written.
Another provision of the law would force companies and exchanges to declare any bitcoin transactions worth more than $10,000.
However, some are concerned that the provision’s definition of a “broker” is too wide as worded.