The most recent proposal from a group of House Democrats intends to modify how tax code updates impact crypto entities "who do not engage in brokerage services."
Lawmakers on both ends of the avenue are protesting against changes to tax reporting rules for cryptocurrency brokers and transactions worth over $10,000 included in the recently passed Infrastructure Bill.
Ten U.S. Democratic members of Congress, guided by Rep. Darren Soto of Florida, have called for modifications to the definition of a broker in the infrastructure bill that was enacted on Nov. 15.
Soto, along with Representatives Ro Khanna, Stacey E. Plaskatt, Eric Swalwell, Tim Ryan, Susan Wild, Marc Veasy, Jake Auchincloss, Al Lawson, and Charlie Crist, issued an open letter asking for updates to section 6045(c)(1) of the tax code under the Bipartisan Infrastructure Framework (BIF).
According to experts, the controversial new rule can identify miners, validators, and wallet developers as brokers for tax purposes. The letter asks House Speaker Nancy Pelosi to eliminate this group as they do not focus on brokerage services.
The letter also seeks to address issues regarding negative market effects and how the US will maintain its rate of technological innovation if regulations remain unchanged.
Senators are also aiming to change the BIF's tax reporting requirements. As per Bloomberg, Democrat Senator Ron Wyden and Republican Senator Cynthia Lumis introduced legislation that they assert protects American innovation, makes sure Americans pay their taxes, and "do not apply to individuals developing blockchain technology and wallets."
On November 16, Republican Senator Ted Cruz introduced legislation to revise the tax code. The new reporting rules, he says, are a "devastating attack" on the cryptocurrency industry. His doubts reflect several of the Democratic House Representatives' issues that the current provision will suppress American innovation, and “endanger the privacy of many Americans.”
Senators are only now beginning to gain a better understanding of how the cryptocurrency industry works as a whole. The Joint Economic Committee of the United States Congress held a hearing on Nov. 17 titled "Demystifying Crypto: Digital Assets and the Role of Government." They addressed the complex tax entities that should govern centralised exchanges at this proceeding, and they all agreed that privacy and security are the main priorities.