The U.S crypto industry is about to score a major legal win as the United States Treasury Department plans to spare crypto miners and other “ancillary parties” from tax reporting rules. In a letter to a group of senators on Friday, the Treasury indicated that it plans to exempt crypto miners, stakers, and other market participants from rules that would require crypto brokers to share data on their clients’ transactions with the Internal Revenue Service.
Crypto validators are “not likely to know whether a transaction is part of a sale.”
“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,” Senator Rob Portman said, announcing the news on Twitter.
In the letter, Treasury Assistant Secretary for Legislative Affairs Jonathan Davidson said that the department’s position is 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.” The senator also emphasized crypto validators are “not likely to know whether a transaction is part of a sale,” while entities involved in offering services related to hardware or software crypto wallets “are not carrying out broker activities.”
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.
As I have said from the start, this requirement only applies to brokers. pic.twitter.com/k5l6kDs4iA
— Rob Portman (@senrobportman) February 12, 2022
Treasury is planning to issue proposed regulations to include its stance on the broker definition.
The U.S Treasury will also consider “the extent to which other parties in the digital asset market, such as centralized crypto exchanges and those often described as decentralized exchanges and peer-to-peer exchanges, should be treated as brokers,” the letter notes. As reported earlier,the Treasury is planning to issue proposed regulations to include its stance on the broker definition.
