The Senate proposes to tighten control over the cryptocurrency. Thus, the senators hope to receive more taxes to finance the US infrastructure development project, which is estimated at $ 550 billion, writes Bloomberg.
The bill obliges crypto brokers to report to the IRS on transfers of digital assets, including virtual currency. It also stipulates that businesses will report on cryptocurrency transfers in excess of $ 10,000.
The proposal was added to the agreement at the last moment, after weeks of bargaining between Republicans and Democrats about what to spend and how to raise funds. A stricter stance on crypto was important for both parties.
Senator Rob Portman, who represents Republicans in negotiations on the deal, says the issue of cryptocurrency transparency has long been a concern in Congress.
“We are all discussing how to ensure better reporting and tax compliance of companies,” he told reporters.
Why are new rules needed?
The US Treasury Department said in its May tax law report that additional regulation of crypto assets is needed to minimise incentives and opportunities to hide revenues.
All cash transfers over $ 10,000 are already subject to IRS reporting requirements.
The IRS believes that more and more tax scams are using cryptocurrency to hide government revenues. In 2020, the service added a “cryptocurrency” column to its tax return to collect more information about citizens’ virtual assets.
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Industry Reactions Several players in the cryptocurrency industry have already criticised the bill. In their opinion, the companies that will be subject to the legislation will not be able to collect the information that the government requires from them.
“This is very problematic,” commented Christine Smith, executive director of the Blockchain Association, a Washington-based trading group.
She argues that the new rules could force some companies to relocate to other countries.
“We are now doing our best to change them.”