More Work Needed on Digital Asset Tax Information Provision in Infrastructure Bill, Says Blockchain Association

Washington, D.C. (August 2, 2021) – The following statement is attributed to Kristin Smith, Executive Director of the Blockchain Association, regarding language included in the roughly $1 trillion infrastructure deal that attempts to pay for a portion of the bill with a new digital asset tax information reporting provision:

“The Blockchain Association and its 46 member companies—companies with tremendous expertise in the crypto ecosystem—appreciate the Senate’s ongoing engagement on the digital asset tax information reporting provisions in the bipartisan infrastructure bill. While some minor improvements have been made, the latest language still poses fundamental concerns and questions about certain terms and definitions used in the provision.

“To be clear, the Blockchain Association firmly believes that all taxpayers should pay the taxes they owe. In fact, our Tax Working Group has had an ongoing dialogue with the IRS and relevant congressional committees for nearly two years to figure out how to best apply an information reporting requirement to traditional cryptocurrency exchanges, enabling their customers to more easily pay taxes.

“However, this provision is written in a way that could be interpreted to apply to persons in the crypto ecosystem who don’t have access to the information required for information reporting. As this bill continues to move through the Senate, we urge Senators to clarify that the language doesn’t capture non-custodial entities in the digital asset ecosystem. If these network participants—who don’t have any customer relationships—are required to provide such information, it will be impossible to comply, driving innovation and business overseas.

“The industry should know—and needs to know—how this provision applies, but it still remains unclear. We look forward to continuing this dialogue and sincerely thank Senate offices for their engagement and attention to this issue so far.”
 

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