Media: U.S. Treasury to Publish Guidance on Crypto-Company Taxation

The U.S. Treasury Department will clarify the tax reporting requirements for crypto companies, which became part of the infrastructure bill. These provisions will apply only to entities that the Treasury regards as brokers. The Bloomberg article, citing a Treasury official, reports this.

According to a source familiar with the publication, the guidance, which could be published as early as next week, is intended to reassure industry participants. Miners, equipment manufacturers and software developers are not covered by the new tax reporting requirements unless they are brokers.

The Treasury’s guidance will not grant exemptions based on how a given company positions itself, instead focusing on whether the entity is classified as a broker under the tax code.

The bipartisan bill aimed at updating the United States’ infrastructure, contains new reporting requirements for participants in the digital-asset industry. It also broadens the definition of “broker” in the U.S. tax code.

According to experts, miners and node operators in blockchains, wallet developers, liquidity providers in DeFi-protocols and other non-custodial players may be required to report to the IRS about their users’ activities.

The bill’s requirements, in this form, are technically unworkable, which is why the document has been criticised by crypto-industry representatives, including Elon Musk and Jack Dorsey.

Their concerns are shared by some senators as well. Ron Wyden, Cynthia Lummis and Pat Toomey proposed to carve out the specified activities from the bill and not extend broker-related rules to them.

One of the bill’s authors — Rob Portman — together with Mark Warner and Kyrsten Sinema introduced a competing amendment. Due to procedural issues, the changes to the document were not adopted; he went to the House of Representatives in its original form.

A Bloomberg source stressed that some industry concerns are warranted, but much of the lobbying is aimed at restricting the Treasury’s authority to collect legitimate tax information. He added that the Treasury does not intend to pursue companies that de facto cannot provide transaction data.

Those seeking to revise the bill’s crypto provisions in the House are unlikely to succeed, because altering the crypto section would open the entire document to further amendments. The Treasury’s leadership will therefore play a decisive role.

In an open letter, Representative Anna Eshoo urged Speaker Nancy Pelosi to amend the crypto-tax provisions in the infrastructure bill.

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