U.S. Rep. Anna Eshoo (D-Calif.), asked House Speaker Nancy Pelosi
(D-Calif.) to amend the crypto tax provision in the Senate’s infrastructure
bill in an open letter on Thursday.
Eshoo, described by Politico in 2014 as
“Pelosi’s closest friend in Congress,” wrote that the
current definition of the term “broker” for crypto tax reporting purposes is
too broad and may be difficult for some entities to comply with.
“When the House takes up the Senate bill, I encourage you to amend the problematic broker definition in Section 80603 of the legislation,” the letter said.
Eshoo joins a growing group of bipartisan lawmakers pushing back against
the crypto provision. House Financial Services Committee Patrick McHenry
(R-N.C.) and a handful of other congressmen on both sides of the political
aisle have expressed their support for changing the language.
The infrastructure bill, a priority for U.S. President Joe Biden, will
fund $1 trillion in infrastructure improvements or new initiatives around the
country, such as passenger rail and electric vehicle charging. Some $550
billion of this will come from new spending, including “pay-fors,” measures
meant to raise funds to pay for the initiatives in the bill.
Under the current terms of the provision, any entity that facilitates a
crypto transaction on behalf of another person would be treated as a broker,
meaning the entity would have to file specific tax information reports that
would include know-your-customer details. However, industry proponents are
concerned this would include miners or other network validators and hardware
developers, who don’t typically have access to this sort of information.
Senators Ron Wyden (D-Ore.), Pat Toomey (R-Pa.) and Cynthia Lummis
(R-Wyo.) proposed an amendment to narrow the scope of the language, while the
provision’s original author, Senator Rob Portman, (R-Ohio) as well as Senators
Mark Warner (D-Va.) and Kyrsten Sinema (D-Ariz.) introduced a different
amendment. Ultimately, the Senate proceeded without considering any amendments,
leading to the majority of the group introducing a compromise amendment that
was blocked under Senate procedural rules.
Eshoo endorsed the compromise amendment in her letter on Thursday.
“I share the goals of the underlying provision to address tax evasion in the cryptocurrency market, but the House should amend it, as the bipartisan compromise amendment would have, to meet this goal without stifling innovation in a nascent industry by imposing unworkable regulations,” Eshoo wrote.
The Senate passed the infrastructure bill on Tuesday. The House is
in recess, but is expected to take up the bill when it returns at the end of
August.
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