The U.S. Treasury Department is preparing to offer an olive branch to crypto developers, miners and hardware firms spooked by the bipartisan infrastructure bill’s tax reporting requirements, according to a Bloomberg News report.
Citing an unnamed department official, Bloomberg said Friday that Treasury won’t go after crypto entities that don’t meet the tax code’s definitions of a “broker.” Guidance on the matter could come next week, the report said.
The guidance would attempt to soothe the crypto industry’s biggest fear: that the Senate’s slapdash effort to tax “any service effectuating transfers of digital assets on behalf of other persons” could blow the nascent industry to smithereens.
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Critics have called the infrastructure bill’s crypto provision overbroad and lobbied for weeks in a fruitless attempt to narrow it down. Many in the industry claimed that developers and miners who meet the bill’s definition of a broker would be forced to provide reporting information they do not have the ability to collect.
The Treasury statement, which is not yet public, could provide a workaround by effectively limiting the bill’s scope to those classified as brokers under the tax code. But it is not entirely clear how that carve-out would combat the concerns of the bill’s staunchest opponents.
According to Cornell Law, the U.S. tax code defines a broker as:
“A) a dealer, (B) a barter exchange, and (C) any other person who (for a consideration) regularly acts as a middleman with respect to property or services.”
Related: Pelosi Ally Asks US House Speaker to Modify Crypto Language in Infrastructure Bill
Treasury is reportedly planning to exempt non-broker parties on a case-by-case basis, a far cry from the more sweeping exemptions the industry had sought.
A department spokesperson did not reply to a request for comment.
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