US Congress plan for expanded cryptocurrency taxation meets resistance

The proposals for cryptocurrency taxation in the U.S. Congress infrastructure bill are “unworkable”. Republican Senator Pat Toomey of Pennsylvania criticized them.

The bipartisan infrastructure package includes a hastily-designed tax reporting regime for cryptocurrency. Simply put, the text is unworkable. I plan to offer an amendment to fix it. https://t.co/LD1Bfwh4yh

— Senator Pat Toomey (@SenToomey) August 2, 2021

The criticisms from Toomey centered on the broker definition. The lawmaker regarded it as overly broad and capable of affecting miners, whom he believes should not be regulated by these provisions. He also noted potential difficulties for non-custodial services implementing his colleagues’ proposals.

Toomey pledged to refine the bill in collaboration with a Democratic colleague who would back his initiative, according to sources cited by CoinDesk.

In July, the U.S. Congress began considering the bipartisan plan to finance infrastructure spending, of which $28 billion would come from taxes on cryptocurrency transactions.

“We should not rush this hastily designed tax reporting regime for cryptocurrencies, especially without a full understanding of the consequences”, Toomey explained.

One of the bill’s authors, Republican Senator Rob Portman of Ohio, rejected the criticism.

“The legislation does not impose new reporting requirements on software developers, miners, node operators. It simply says that brokers must comply with standard information reporting obligations. Which many already do!”, he emphasized.

The legislation does not impose new reporting requirements on software developers, crypto miners, node operators or other non-brokers.

It simply says that brokers must comply with standard information reporting obligations. Which many already do!

— Rob Portman (@senrobportman) August 3, 2021

Lawyer Jake Chervinsky criticized the proposed bill. To resolve the impasse, he proposed introducing a clear definition of ‘digital asset’ that is missing from the bill, which would prevent changing the definition of ‘broker’ in the tax code.

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