US Congress sent bill to President Biden with crypto tax provision

Congress passed a bipartisan infrastructure bill that contains a controversial crypto tax reporting requirement.

US Congress sent bill to President Biden with crypto tax provision

Congress passed a bipartisan infrastructure bill that contains a controversial crypto tax reporting requirement.

With at least 218 house members' approval late Friday night, the House passed the bill, fulfilling a key priority for the Biden administration amid controversy over whether a Democrat-led companion bill would also advance.

As a result of lawmakers shooting down any attempts to amend the crypto provision, the Senate originally passed the bill in August. Now the bill needs to be signed by U.S. President Joe Biden.

Tax reporting provisions within the bill that would have expanded the definition of a broker for IRS purposes caused concern in the crypto industry. Under the current tax code, all brokers would be required to report transactions.

Some industry proponents were concerned the definition would capture parties such as miners and other parties that don't help facilitate transactions.

Another provision in the bill that amends section 6050I of the Tax Code has also caused anxiety in the crypto industry.

Essentially, the law requires recipients of in-person cash transactions over $10,000 to verify the sender's identity, record the sender's Social Security number and other information, and report the transaction to the government within 15 days after it occurs.

Violations of 6050I, unlike other tax code violations, are felony offenses, and some lawyers have pointed out that the law may be nearly impossible to obey when applied to crypto-assets and other digital assets such as non-fungible tokens (NFTs).

The bill's passage in the Senate, where the infrastructure bill originated, was held up by opposition to the provision, giving the industry the chance to propose amendments to modify the language.

Although an amendment was sought at the last minute, the Senate did not adopt any changes to the bill.

Until the Treasury Department publishes guidance outlining how businesses will have to comply with the bill, it has yet to explain how it plans to interpret the bill.