US Treasury Secretary Janet Yellen has reportedly objected to lawmakers regarding crypto tax amendments to a $1 trillion infrastructure bill backed by the crypto community. The White House later announced its support for a competing amendment.
Yellen’s impact on lawmakers regarding crypto taxation
The new crypto tax proposal in the $1 trillion infrastructure bill has become the subject of intense controversy over the past week.
So far two amendments have been put forward: one sponsored by Senator Mark Warner, Rob Portman and Kirsten Cinema. The second, which has gained the support of the crypto community, is sponsored by Senators Ron Wyden, Cynthia Loomis and Pat Tomei.
According to Washington Post reporter Jeff Stein, Treasury Secretary Janet Yellen spoke with lawmakers on Thursday to object to the amendment sponsored by Senators Tommy, Wyden and Loomis. She tweeted Friday, citing sources familiar with the matter:
Treasury Secretary Janet Yellen is privately lobbying lawmakers against the Wyden-Loomis-Toomi crypto amendment, as the White House seeks to push new regulatory authorities to limit it.
The cryptocurrency tax proposal in the Infrastructure Bill consists of two major parts. The first payment of more than $10,000 is required to be reported to the Internal Revenue Service (IRS). The other requires crypto “brokers” to file a type of 1099 form for certain types of crypto transactions.
The definition of a crypto broker in the original proposal includes miners and software developers. This has caused an uproar in the crypto community because miners and software developers do not know who their users are, making it impossible to report to the IRS. Some lawmakers have rejected the original proposal, including Senator Pat Tomei, who said the plan was “impractical”. The two amendments are intended to clarify the definition of a broker.
The crypto industry believes that the Wieden-Lomis-Tumey Amendment sufficiently clarifies what a broker is.
In contrast, the Warner-Portman-Cinema crypto amendment exempts only proof-of-work mining, raising more concerns that the government is now picking winners and losers in innovation. However, this amendment has received support from the White House.
The initial crypto tax plan was drawn up by Senator Portman with the help of Treasury Department officials. The crypto transaction is expected to raise approximately $28 billion over 10 years to help fund the infrastructure package.
Treasury Secretary Yellen has repeatedly expressed his concern about the use of cryptocurrencies in illicit financing. She warned in February: “To the extent it is used, I fear it is often for illicit finance. It is an extremely inefficient way to transact, and to process those transactions.” The amount of energy expended is staggering.”
What do you think about Treasury Secretary Yellen lobbying against the amendment supported by the crypto community? Let us know in the comments section below.
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