Cryptocurrency advocacy group Coin Center has provided suggestions for United States lawmakers to consider in potential legislation related to the taxation of digital assets.
In an Aug. 21 letter to Sens. Ron Wyden and Mike Crapo, Coin Center pointed to the Virtual Currency Tax Fairness Act — a bill previously introduced in other sessions of Congress — for provisions, including having the Internal Revenue Service (IRS) establish a de minimis exemption for crypto transactions. The measure could be aimed at encouraging crypto as a method of payment by treating digital asset transactions like ones used to purchase foreign currency.
Secondly, the advocacy group called for lawmakers to consider not applying U.S. tax law reporting requirements for second parties to digital assets. According to Coin Center, a crypto user in the United States could be legally required to provide “incomplete or non-existent” information on senders of digital assets, creating privacy concerns and an undue burden on filers.
“[F]orcing ordinary people to collect highly intrusive information about other ordinary people, and report it to the government without a warrant, is unconstitutional under the Fourth Amendment,” said Coin Center. “[D]emanding that politically active organizations create and report lists of their donors’ names and identifying information to the government is unconstitutional under the First Amendment.”
Today, @coincenter responded to @SenateFinance @RonWyden & @SenFinance @MikeCrapo‘s request for policy input on the taxation of digital assets. https://t.co/px3MEcigHf
— Landon (@Landon) August 21, 2023
Other suggestions for Wyden and Crapo to consider included revising the IRS definition of a broker to explicitly exclude crypto miners and Lightnin
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Author: Turner Wright
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