Report: Woes under the Infrastructure Bill to be answered by the Treasury
The U.S Treasury Department might exclude crypto miners and stakers from a crucial rule going forward, reported Bloomberg. It has to do with the rule where brokers of virtual assets are required to provide information on their clients’ transactions to the Internal Revenue Service (IRS) under last year’s infrastructure bill.
Congress had made way for the bipartisan infrastructure bill in November 2021, that contains tax reporting requirements for crypto investors. The updated decision was included in a letter sent to a group of senators.
Bloomberg News reported that the Treasury Assistant Secretary for Legislative Affairs Jonathan Davidson said the department’s view is that “ancillary parties who cannot get access to information that is useful to the IRS are not intended to be captured by the reporting requirements for brokers.”
This essentially indicates to include miners, stakers, and validators, along with software and hardware providers. To recall, the industry was expressing displeasure against the broad definition of “brokers” and a statute for personal reporting requirements under the bill. However, entities under the tag will have to collect and disclose detailed information on customers. This can include anything from names to capital gains and losses.
Now, as the treasury clarifies the reporting requirements, Senator Pat Toomey told Bloomberg,
“This interpretation can always change, which is why Congress should act.”
With that being said, states with abundant mining opportunities have been especially looking forward to the clarification. Not so long ago, Texas Governor Greg Abbott had tweeted that “Texas will be the crypto leader” as he had shared the news of cryptocurrency kiosks in some Texas grocery stores. In many crypto-friendly states like Texas, there was opposition to the bill.
Back in June 2021, the Texas Department of Banking had issued a letter authorizing state-chartered banks to provide customers with virtual currency custody services. During that time, miners from China were eyeing Texas as their exodus destination. Giants like Shenzhen-based BIT Mining and Beijing-based Bitmain expanded in the state as per reports.
In the latest, Intel has joined the bandwagon by launching a new chip for Bitcoin mining and minting NFTs as usage of cryptocurrencies skyrockets. Therefore, clarity might be good news to many of these players.