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Infrastructure Bill with crypto tax provisions knocks the doors of the Oval

Updated: Jul 25, 2024
Published: Nov 6, 2021
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On Friday night, the US House of Representatives, the Lower House of the US Congress, passed the Infrastructure Bill with crypto tax provision. 

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The Infrastructure Bill approved with majority

The Infrastructure Bill was put to the vote on Friday night and approved with the support of 218 ayes. The nays rested at 206 as the Bill proves to be a significant step for the Biden administration. After the Covid relief fund, this Bill seems to be one of the most important reforms get past Congress. The $1 trillion bipartisan Infrastructure Bill includes funding for improved transportation, broadband, and utility. 

The Bill also includes controversial laws related to cryptocurrency taxation. Taking a lot of heat during the past few weeks, the Bill has been discussed thoroughly across various social media platforms and what it brings to crypto investors. Major monetary reform for the Biden administration, the Bill sought to expand the definition of a broker (commonly called the "broker provision") for Internal Revenue Services (IRS) purposes. 

The future of cryptocurrencies to change

Amending the Section 6045(c)(1) of the Internal Revenue Code (IRC), Section 80603 of the Infrastructure Bill states that a broker is "any person who (for consideration) is responsible for regularly providing any service effectuating transfers of digital assets on behalf of another person." According to the stipulations of the Bill, these 'brokers' will have to report their transaction proceedings, recording all the information of the people involved in the transaction. 

The said information is to be submitted to authorities. This is nearly impossible to implement for a blockchain that is publicly accessible, and in any case, it becomes unthinkable for 'brokers' to report the said information. Moreover, the definition of the term 'broker' is quite vague, and it might actually involve miners too, although they practically don't have any involvement in the transactions themselves.  

The resistance against the Infrastructure Bill has resonated across the entire crypto industry, with many prominent individuals expressing their concerns. However, the Bill passed the Senate in August and will take a few days for the President to sign it.  

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