In Brief:
- Senators have suggested an amendment to the infrastructure bill that states that the term “broker.”
- Senators like Wyden and Lummis attempted to incorporate a similar provision in the 2021 infrastructure bill in August, but failed anyway.
Senators Ron Wyden (D-OR) and Cynthia Lummis (R-WY) introduced legislation to clarify the definition of digital asset “broker” in the Infrastructure Investment and Jobs Act/Bipartisan Infrastructure Framework (HR 3684), signed into law by President Biden later yesterday.
Those participating in digital asset mining or staking, supplying digital asset hardware or software wallets, or inventing digital asset protocols may fall within the definition of “broker” for tax reasons, and be subject to IRS reporting obligations.
The senators’ measure clarifies that the term “broker” does not include miners and stakers, as well as wallet providers and developers, and ensures that only those digital asset intermediaries who have genuine access to important client information must report to the IRS.
Senators Wyden, Lummis, and others attempted in August to include a similar provision in the 2021 infrastructure bill.
Senator Wyden said “with the infrastructure bill on the verge of becoming law, it’s critically important to protect innovation in the digital asset space.”
He further added, “our bill makes clear that the new reporting requirements do not apply to individuals developing blockchain technology and wallets. This will protect American innovation while at the same time ensuring those who buy and sell cryptocurrency pay the taxes they already owe.”
Senator Lummis said, “digital assets are here to stay in our financial system and the decisions we make now will have impacts far into the future.” She went on saying, “we need to be fostering innovation, not stifling it, if we are going to maintain America’s position as the global financial leader. I’m proud to introduce this bipartisan bill to ensure that our tax system reflects the realities of digital assets and distributed ledger technology. ”
At the beginning of this month, after months of internal deliberations and deliberate disagreements among Democrats, Congress enacted a $1.2 trillion bipartisan infrastructure bill.
