US may postpone new tax on cryptocurrency
2022.12.16 01:41
US may postpone new tax on cryptocurrency
Budrigannews.com – Patrick McHenry, the new chair of the House Financial Services Committee, wants the Treasury to put off putting into effect a part of the Infrastructure Investment and Jobs Act that deals with digital assets and tax collection.
On December 14, McHenry wrote to U.S. Treasury Secretary Janet Yellen with questions and concerns regarding the Act’s scope. In the letter he mentioned explanation over the “ineffectively drafted” and possibly security compromising Segment that arrangements with the tax collection from advanced resources, planned to become real in 2023.
According to him, the section requires the government to treat digital assets as if they were cash for tax purposes, which could “jeopardize” Americans’ privacy and hinder innovation.
The section titled “Information Reporting for Brokers and Digital Assets” mandates that brokers submit certain data to the Internal Revenue Service (IRS) regarding their interactions with digital assets.
McHenry contends that the section was poorly written and that the term “brokers” may have been “wrongly interpreted” to refer to a wider range of individuals and businesses than was intended.
The Act stipulates that any digital asset transactions exceeding $10,000 must be reported to the IRS by individuals or organizations engaged in trade or business.
More New Accusations of Cryptocurrency Activity
Coin Center, a non-profit advocacy group that focuses on blockchain technology, filed a lawsuit against the Treasury earlier this year, claiming that the rule will impose a regime of “mass surveillance” on U.S. citizens.
The Fordham International Law Journal claims that the section is likely to impose reporting requirements on the major cryptocurrency exchanges that already possess customer information such as social security numbers, addresses, and names.
McHenry acknowledged that the Treasury Department’s statement that “ancillary parties” should not be subject to the same reporting requirements as brokers was a positive development.
In FebruaryU.S. Congressperson Burglarize Portman shared a letter from the U.S. Colleague Secretary for Regulative Undertakings, Jonathan Davies through Twitter that explained that gatherings, for example, crypto excavators and stakers are not expose to the new regulation.
In order to give “market participants” time to comply with any new requirements, McHenry concluded his letter by requesting that the Treasury “immediately” publish the rules under the section and postpone their effective date.
This is the second letter McHenry has written to Yellen this year. On January 26, he wrote a letter to the Treasury secretary requesting that the definition of a broker be clarified.
