US “turns around”, temporarily does not tax “crypto brokers”

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2022-06-30 05:18:56

The US Treasury Department decided to delay the tax on “crypto brokers”, one of the terms that has been and is quite controversial.

US “turns around”, temporarily does not tax “crypto brokers”

As reported by CHKPresident Biden approved the $1 trillion Employment and Infrastructure Investment Bill, which includes a controversial crypto tax provision in November 2021. Under the bill that would have gone into effect January 1, 2024, section 6050I requires “crypto brokers” dealing with digital asset transactions valued at more than $10,000 or more to be obligated to report and file tax returns to the U.S. Internal Revenue Service (IRS). However, the law equates the term “crypto broker” with any other crypto-related service provider.

The rescheduled implementation of the above regulation by the Treasury Department is expected to lose billions of dollars in taxes for the Biden administration in fiscal year 2023. It is estimated that a strict tax on crypto will help reduce the deficit $11 billion budget over the next 10 years.

Jake Chervinsky, head of Policy at the Blockchain Association, responded to the news as follows:

“Procrastination is smart. We are getting closer to the effective date of the bill and we are still waiting for guidance and implementation rules. If it is indeed delayed, then this is indeed good news.”

Since The Infrastructure Investment and Jobs Bill passed, many Industry experts and lawmakers have deemed the bill too “ambiguous” when has equated the crypto broker with too many other stakeholders in the field such as miners, producers, node operators, staking participants, miner sellers, software developers such as crypto wallets… This inadvertently puts undue pressure and burden on individuals or organizations that do not directly process transactions, especially when All transactions are anonymous and the number of daily transactions is huge in the crypto space.

At the beginning of this month, Coin Center filed a lawsuit against the US Treasury Department and the IRS for amending tax regulations contrary to the Constitution. The lawsuit alleges that the Employment and Infrastructure Investment Bill’s requirement for tax reporting is “unconstitutional” in violation of the IV amendment, specifically section 6050I.

In terms of the legal framework, the French authorities are “sprinting” to finalize the regulatory framework for cryptocurrencies and also this morning, the EU published a draft anti-money laundering law for crypto wallets.

Synthetic CHK

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