Lawmakers Push for Bill to Fix “Regulatory Overreach” on Crypto
A group of US lawmakers led by congressmen Patrick McHenry and Ritchie Torres plans to reform the crypto tax reporting provisions introduced in 2021 under the $1.2 trillion infrastructure bill. The lawmakers said the bill’s reintroduction would spur innovation in the sector and bring more clarity to the industry operating in the United States.
Lawmakers to Reform 2021 Crypto Tax Reporting Requirements
A bipartisan group of US lawmakers is set to push on Tuesday to reintroduce a bill that will reform crypto tax reporting provisions, Punchbowl news reported.
The bill, dubbed “Keep Innovation in America Act,” was first introduced and co-led by Committee Chair Patrick McHenry and Rep. Ritchie Torres in 2021 to narrow the definition of a “crypto broker” for tax purposes. It represents an adjustment to crypto rules first unveiled and passed under the Infrastructure Investment and Jobs Act (IIJA).
Now, lawmakers are planning to reintroduce the bill. Apart from previous issues, they would also restrict “the federal government’s ability to define what a “digital asset” is,” the report says. In other words, the bill would limit the US Treasury Department’s power to define crypto obtained after the implementation of IIJA.
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Current Reporting Provisions Could Stifle Crypto Innovation, Lawmakers Say
The move comes around one and a half years since US President Joe Biden signed the $1.2 trillion bipartisan infrastructure bill into law. The initial legislation included tax reporting provisions concerning digital assets such as cryptocurrencies and non-fungible tokens (NFTs).
Now, lawmakers are fighting to reform the bill because they believe the current reporting provisions are “incompatible with this technology’s operation,” the bill states. As a result, lawmakers said it could hinder innovation in the digital assets sector.
McHenry said the restored bill would address “misguided policy and regulatory overreach [that] threatens to push this dynamic industry – and its potential benefits – overseas.” In addition, it would also bring “much-needed legal and regulatory clarity to help cement our continued place as the global leader in crypto technology and innovation,” said Ritchie Torres, one of the key crypto proponents in Washington.
Earlier today, Thailand’s government said it would offer tax breaks for digital token issues. The cabinet spokesperson said Thailand expects the move to bring $3.71 billion worth of investment token offerings over the next two years.
Meanwhile, the US government continues to crack down on crypto firms after several bankruptcies last year highlighted the risks of the loosely regulated sector. Companies that regulators have recently targeted for scrutiny include crypto exchanges like Binance and Kraken.
Do you agree with lawmakers’ views that current crypto tax reporting provisions could impede innovation in the sector? Let us know in the comments below.