US Legislators Propose Law to Solve Crypto Reporting Problems

The legislation calls for delaying the reporting requirements until 2026, as well as altering the definition of broker.

A group of United States lawmakers has introduced legislation that would alter the tax reporting requirements set forth in the recently implemented infrastructure bill.

Legislation will affect transactions worth more than $10,000

The Keep Innovation in America Act, sponsored by Reps. Patrick McHenry (R-NC) and Tim Ryan (D-OH), would modify the definition of broker as defined in HR 3684. The bipartisan infrastructure bill signed into law by President Joe Biden on Nov. 15.

The bill proposes delaying the mandated reporting deadlines — which will take into account digital asset transactions worth more than $10,000 to be reported to the IRS — between 2024 to 2026.

I introduced this bipartisan bill w/ @RepTimRyan to fix the new poorly constructed #digitalasset reporting requirements.

The Keep Innovation in America Act will provide clarity to innovators deploying the next generation of internet #technology. https://t.co/cAMWsPoiD8

— Patrick McHenry (@PatrickMcHenry) November 18, 2021

The legislation if signed into law will also exempt some taxpayers from filing their digital asset transactions reports in cases where they have no cause to know information held by wallet users about their finances.

“Hardware and software developers, mining and validators; as well as protocol builders are not act as brokers under the bill,” it states.

The Keep Innovation in America Act, which by the House Financial Services committee in July 2018, states; “consistent and correct reporting on digital asset transactions is critical.” Congress must work to provide legal and regulatory certainty for the digital asset industry. Clear rules of the road encourage technological progress.

McHenry added:

“[The legislation] includes digital asset reporting obligations that threaten to drive innovators and entrepreneurs away from the United States. We can modify these poorly written standards and ensure they are in line with how this new technology really works.”

The new legislation has the backing of notable Representatives and crypto advocacy organizations such as Coin Center and the Blockchain Association.

However, a number of legislators have been trying to establish their own legislative route; to change the crypto language in the infrastructure law. With a proposal from Ron Wyden and Cynthia Lummis, as well as a separate bill from Ted Cruz, which was submitted this week.