US Infrastructure Law’s Reporting Requirements for Crypto Brokers Likely to Face Delay
Don't miss CoinDesk's Consensus 2022, the must-attend crypto & blockchain festival experience of the year in Austin, TX this June 9-12.
Hotly debated reporting requirements for crypto exchanges and brokers included in U.S. President Joe Biden’s $1 trillion infrastructure law could face a major delay.
Many in the crypto industry have pushed back against the reporting provision in the infrastructure law, claiming that the law’s definition of “broker” is overly broad, and could theoretically be applied to crypto miners and decentralized protocols.
The back-and-forth over how “broker” will be defined, as well as the challenges of implementing a reporting regime, are likely to blame for the potential delay. However, no final decision has been made on whether the reporting requirements will be delayed or, if they are, how long the delay will last.
Bloomberg first reported the news.
Under the law, which was passed by Congress in November, crypto brokers would be required to collect detailed information, including customer names and addresses and capital gains or losses, on customers and their trades.
The collection requirements were initially slated to take effect in January 2023, with companies required to start sending reports to both their clients and the Internal Revenue Service (IRS) in 2024. The reporting requirements are intended to make it easier for crypto investors to do their taxes – and for the IRS to sniff out tax evasion.
The Treasury Department has been vocal about its concern over unpaid crypto taxes, which analysts have estimated as roughly 10% of all unpaid taxes – the so-called “tax gap” that has become a battle cry for Treasury Secretary Janet Yellen.
News of the delay will likely come as a relief to many companies that fit the “broker” definition, but this delay – if it even happens – is likely only temporary.
Nikhilesh De contributed reporting.
