September 12, 2021

The U.S. Treasury Department called the development of guidance on the taxation of cryptocurrencies a priority

The U.S. Treasury Department called the development of guidance on the taxation of cryptocurrencies a priority

The U.S. Treasury Department has confirmed its intentions to publish guidance on the taxation of cryptocurrencies. The relevant paragraph is contained in the "Tax Administration" section of the agency's 2021-2022 priority plan.

Rules relating to the reporting of virtual currency under Section 6045, the document said.

The 2020 plan contained a similar phrase. Section 6045 of the U.S. Internal Revenue Code deals with reporting by brokers. Once a year, traditional exchanges are required to send their customers and the IRS completed 1099 forms, which contain information about trading activity. Cryptocurrency platforms are now exempt from these rules.

Earlier, the U.S. Treasury Department's plans to clarify tax reporting requirements for cryptocurrency companies were reported by Bloomberg, but there was no official confirmation of this information. The Treasury Department's guidance is intended to reassure industry participants who are concerned about the impending legislative changes.

The bipartisan bill, aimed at updating the United States infrastructure, contains new reporting requirements for participants in the digital asset industry. It also expands the definition of "broker" in the U.S. tax code.

The bill's requirements in this form are technically infeasible, for which the document has been repeatedly criticized by representatives of the crypto industry, including Elon Musk and Jack Dorsey.

Their concerns are shared by some senators as well. Ron Wyden, Cynthia Lummis and Pat Toomey suggested excluding these types of activities from the document and not extending the rules applicable to brokers to them.

One of the bill's sponsors, Rob Portman, along with Mark Warner and Kirsten Sinema, introduced a competing amendment. Due to procedural problems, the amendment did not pass; it went to the House of Representatives in its original form.

As a reminder, House Member Anna Eshoo asked Speaker Nancy Pelosi in an open letter to amend the cryptocurrency provisions of the document, but on August 24, the congressmen voted for the original version. The next vote is scheduled for Sept. 27.

Jack Evans

About the author

I became a crypto asset owner in 2014, when the industry was in its infancy. Before that, I was working in the classic US and European stock markets. Since then, I have gained extensive experience in both cryptocurrency investing and day trading. I am happy to share with readers my experience with crypto exchanges, DeFi and NFT instruments. 

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