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US Treasury states that crypto miners are free from IRS reporting laws

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The US Treasury announced that crypto miners and wallet holders are exempted from IRS reporting rules, and is working on relevant regulations.

The crypto industry in the United States is set to score a huge legal victory, as the United States Treasury Department intends to exempt crypto miners and other "ancillary parties" from tax reporting regulations.

The US Treasury signaled in a letter to a group of senators on Friday that it intends to exempt crypto miners, stakers, and other market users from regulations that would mandate crypto brokers to share information on their clients' transactions with the Internal Revenue Service.

“Appreciate the Treasury Department affirming that crypto miners, stakers and those who sell hardware and software for wallets are not subject to tax reporting obligations,” Ohio Republican Senator Rob Portman said on Twitter, breaking the news.

Treasury Assistant Secretary for Legislative Affairs Jonathan Davidson said in the letter that “ancillary parties who cannot get access to information that is useful to the IRS are not intended to be captured by the reporting requirements for brokers.”

Davidson further stated that crypto validators are“not likely to know whether a transaction is part of a sale,”  but businesses providing services linked to hardware or software crypto wallets “are not carrying out broker activities.”

According to the letter, the Treasury would also assess “the extent to which other parties in the digital asset market, such as centralized exchanges and those often described as decentralized exchanges and peer-to-peer exchanges, should be treated as brokers.”

As per Bloomberg, the Treasury intends to release revised regulations that will contain its position on the broker concept.

President Joe Biden inked the $1 trillion infrastructure bill in mid-November 2021, necessitating crypto market players to register all digital asset transactions worth  $10,000 to the IRS, as reported earlier.

Many senators, notably Pennsylvania Republican Pat Toomey, Oregon Democrat Ron Wyden, and Wyoming Republican Cynthia Lummis, asked the Treasury to explain the term of broker in the infrastructure law in December, intending to introduce related legislation. In November, a group of House Democrats supported a similar move.

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