The US lawmakers are set to reintroduce the Keep Innovation in America Act targeting to reform crypto tax treatment. The reintroduction of the bill since its first presented to the legislature in March 2021 is projected to reform the crypto tax reporting.
Crypto Tax Reforms Bill Reintroduced
News of the bill reintroduction that appeared on March 7 within the Punchbowl report indicated that the bill is co-led by the representative of North California, Patric McHenry, and New York’s colleague Ritchie Torres seeks a narrowed definition of crypto broker.
The narrowed definition is set to reform the crypto tax treatment. In particular, the bill considers crypto brokers as any individual ready to effect digital asset sales through a directive issued by their clients.
Lawmakers are projecting that implementing the reforms agenda captured in the proposed bill will eliminate the prevailing reporting requirements currently considered as dampening innovation within the digital assets sector.
Incompatible Compliance Requirements in Current Law Provisions
The bill promoters argued that current law provisions task the participants within the digital asset market to comply with the reporting requirements and standards. They consider such provisions as incompatible with crypto technology’s operation.
Representatives McHenry and Torres consider that continued reliance on the current law provisions would hinder digital assets development. Ironically, imposing regulatory pressure for participants to comply with the set laws, as witnessed by the increased purge by the US Securities and Exchange Commission, would trigger an exodus of blockchain and crypto-exchange services developers outside the country.
Inadequacy of Existing Infrastructure Bill
The proponents of the reintroduced bill portray its provisions as correcting the incompatibility existing in the current laws. In particular, Representative McHenry decried the Infrastructure Investment and Jobs Act (IIJA) provisions that oblige validators, mining firms, and developers to collect unreasonable information.
The bill advocates lamented the incompatibility of existing law. The error is evident in the Infrastructure bill plunging the crypto sector into an endless fight with the political players. The latter would eventually lose the battle. Advocates of the Infrastructure bill projected the digital assets treatment to saddle the non-financial operators with impossible-to-fulfill requirements.
Comparing Reintroduced Bill with Existing Laws
The revised crypto bill reintroduced by Representatives McHenry and Torres is set to limit the federal government’s capability to define digital assets. Representative Torres considers that the Treasury Department expressed discretion to ascertain what constitutes crypto under the IIJA provisions.Instead, KIAA would trim such discretion.
McHenry’s explanatory statement on the proposed bill restated that it would rectify the regulatory overreach that recently threatened to kick out the dynamic crypto industry from the US.
In his subsequent address to the house, Representative Torres emphasized his pro-crypto stance by indicating that the KIAA would deliver the much-sought regulatory clarity. Its ultimate enactment would cement the US leadership in dictating crypto innovation and technology.
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