The US Treasury Department has confirmed that crypto miners and wallet operators are exempt from the tax reporting requirements imposed by the IRS.
The cryptocurrency industry in the United States is poised for a major legal victory as the US Treasury plans to exempt crypto miners and other "side parties" from tax reporting.
In a letter to a group of senators on Friday, the US Treasury Department indicated plans to exempt crypto miners, stakers and other market participants from these regulations. These stipulate that crypto brokers must forward data about their customers' transactions to the tax authorities.
"I applaud the Treasury Department's acknowledgment that crypto miners, stakers and those who sell hardware and software for wallets are not subject to tax reporting," said Senator Rob Portman, who tweeted the news.
In the letter, Jonathan Davidson, the Treasury Department's assistant secretary for regulatory affairs, explained the department's stance: "Auxiliaries who do not have access to information useful to the IRS should not be affected by broker reporting requirements."
Davidson also emphasized that crypto validators "are unlikely to know if a transaction is part of a sale." Companies that offer services related to hardware or software crypto wallets also say “no brokerage activities”.
The Treasury Department will also consider "the extent to which other parties in the digital asset market, such as centralized exchanges and those often referred to as decentralized exchanges and peer-to-peer exchanges, should be treated as brokers," as stated in the writing means.
As Bloomberg reported, the Treasury Department intends to release these regulatory proposals along with a definition of the term broker.
As previously reported, US President Joe Biden signed into law what is known as the Infrastructure Act in mid-November 2021 , obliging crypto market participants to report all transactions involving digital assets worth over US$10,000 to the tax authority.
Several senators, namely Pat Toomey, Ron Wyden and Cynthia Lummis, then asked the Treasury Department in December to clarify the term "broker" in the infrastructure bill and planned to introduce regulation to that effect. A group of House Democrats backed a similar initiative in November .
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