The cryptocurrency industry in the United States is on the verge of a huge legal victory. As the US Treasury Department intends to exempt crypto miners and other “ancillary parties” from tax reporting requirements.
In fact, the US Treasury said it plans to exempt crypto miners and stakers. As well as other market participants from laws. That would require crypto brokers to share data on their clients’ transactions with the Internal Revenue Service. In a letter to a group of senators on Friday.
“It’s great to see the Treasury Department confirm that crypto miners, stakers, and those who provide hardware and software for wallets are not subject to tax reporting duties,” Ohio Republican Senator Rob Portman stated on Twitter.
Treasury Assistant Secretary for Legislative Affairs Jonathan Davidson said in the letter that “ancillary parties who cannot acquire access to information that is helpful to the IRS are not intended to be covered by the reporting requirements for brokers,” according to the letter.
Organisations “do not engage in broker operations”
Crypto validators are “unlikely to know if a transaction is part of a sale,” according to Davidson. While organisations that provide services connected to hardware or software crypto wallets “do not engage in broker operations.”
According to the letter, the Treasury would also investigate “whether other companies in the digital asset market, such as centralised exchanges and those sometimes labelled as decentralised exchanges and peer-to-peer exchanges, should be classified as brokers.”
According to Bloomberg, the Treasury Department intends to submit draught regulations that include its position on the broker term.
President Joe Biden signed the $1 trillion infrastructure bill in mid-November 2021. Mandating crypto market participants to declare all digital asset transactions worth moreover $10,000 to the Internal Revenue Service.
In December, several senators, notably Pennsylvania Republican Pat Toomey, Oregon Democrat Ron Wyden, and Wyoming Republican Cynthia Lummis, encouraged the Treasury to clarify the definition of broker in the infrastructure law, with the intent of introducing related legislation. In November, a group of Democratic House members backed a similar proposal.