Rep. Patrick McHenry, the chairman of the House Financial Services Committee, strongly opposes the crypto tax rules proposed by the Treasury Department and the IRS. He views these rules as part of the Biden administration’s ongoing campaign against the digital asset ecosystem.
The proposed regulations, issued on August 25th, would necessitate crypto brokers to disclose critical customer information such as names, addresses, and taxpayer identification numbers, along with transaction details like gross proceeds and basis.
The objective behind these rules is to implement a provision in the 2021 infrastructure law that aims to generate $28 billion in revenue via crypto taxation. However, McHenry contends that these regulations are overly broad and ambiguous while failing to capture Congress’s original intentions.
Numerous lawmakers from both parties have emphasized the importance of a narrow, tailored, and clear proposed rule. They highlight that the complexity and novelty of the crypto industry make it unrealistic to finalize the rules by the end of this year as required by the infrastructure law.
McHenry Pushes For Alternative Crypto Legislation
McHenry urged the Biden administration to cease its efforts in undermining the digital asset ecosystem within the United States. Instead, he proposed collaborating with Congress to establish clear and definitive guidelines for the industry.
Additionally, McHenry highlighted his bipartisan bill called the Keep Innovation in America Act, which was co-sponsored by Rep. Ritchie Torres and others. This bill aims to ensure that only entities involved in brokering digital assets for customers are subjected to reporting requirements.
The bill explicitly excludes crypto miners, node operators, hardware operators, and other participants who lack access to customer information or transaction control. His proposals would provide clarity and security to the crypto industry while ensuring compliance with tax regulations and preventing fraud.
He noted that this approach aligns with recommendations from the leading trade group, Blockchain Association. McHenry has consistently supported crypto regulation and innovation within Congress, as well as the Digital Tokens Act and Ransomware and Financial Stability Act.
Furthermore, he has provided insights on recent developments within the crypto sector, such as PayPal’s stablecoin launch decision and BlackRock’s application for a spot Bitcoin ETF.
Related Reading | Ethereum Sees Surge In Large Addresses & Transactions Amidst Price Dip