US Treasury: IRS Doesn’t View Miners, Stakers, Coders As Brokers
The Treasury confirmed in a letter to six concerned senators that it has no plans to treat crypto miners, stakers and wallet providers as brokers for tax purposes.
According to the letter:
“Existing regulations impose broker reporting obligations only on market participants engaged in business activities that provide them with access to information about sales of securities by taxpayers.”
The Internal Revenue Service (IRS) requires brokers to keep information on the entities that they transact for. In crypto, the issue appeared as a part of a new reporting rule that became law as part of last year’s Infrastructure Bill.
The bill apparently defined every service provider involved in facilitating transactions for crypto as ‘brokers,’ which became to a key point as the Senate debated the infrastructure bill.
The letter was sent to six senators, Cynthia Lummis, Mark R. Warner, Rob Portman, Kyrsten Sinema, Pat Toomey and Mike Crapo. The six were involved in efforts to change the crypto reporting language and raised privacy concerns as an issue, as well as the technological impossibility of a crypto miner keeping information on every party and transaction they validate.
The Treasury is seemingly aligned with the views of the senators, and wrote:
“They are consistent with the Treasury Department’s view 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. For example, persons who are just validating transactions through a consensus mechanism are not likely to know whether a transaction is part of a sale. And persons who are only selling storage devices used to hold private keys or persons who merely write software code are not carrying out broker activities.”
However, the letter is far away from actual formal guidance, which is likely to require multiple rounds of proposals, public commenting and revisions to formalize a final tax reporting policy.
Crypto taxes remain a foggy area, with most legislation that addresses the subject struggles to make it out of committee.
