Bitcoin Lobby Losses: Senate Rejects Revised Crypto Tax Provisions In Infrastructure Bill

Senate rejected a crypto industry-backed amendment that exempts non-holding crypto players from a cryptocurrency tax reporting requirement built into the $ 1 trillion infrastructure bill.

amendment failed after Senator Richard Shelby tried to add $ 50 billion to spending on military infrastructure.

original language of the bill changed the tax filing requirements to define some actors involved in digital assets as “intermediaries” for tax purposes. This would require them to submit 1099 tax forms to the IRS on behalf of clients, even if they don’t have access to that information.

Proponents of the cryptocurrency industry had argued that the bill’s language was too broad and would put a brake on innovation.

After tableting rival amendments last week, the senators behind those amendments agreed to a compromise Monday morning. Toomey-Warner-Lummis-Sinema-Portman Amendment made it clear that non-custodial actors like Bitcoin miners, proof-of-stake network validators, wallet providers, and protocol developers would not be included in the Bill’s reporting mandate.

However, as the discussion on the infrastructure bill had already closed on Sunday night, the amendment could only be accepted into the bill unanimously; a single “no” vote would sink him and send the original language of the bill for a vote tomorrow.

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Senators Pat Toomey (R-PA), Cynthia Lummis (R-WY) and Rob Portman (R-OH) spoke in favor of the compromise amendment, as did Senator Ted Cruz, who predicted that some would speak to the opposition.

It just didn’t happen. Instead, Senator Richard Shelby (R-AL) attempted to consider his own amendment, which would have added $ 50 billion in military spending, to the crypto amendment. Senator Toomey, who had stood up to ask for unanimous consent from the hall, allowed it, but Senator Bernie Sanders (I-VT) did not. Senator Shelby later withdrew the cryptocurrency amendment.

Senator Richard Shelby (R-AL) opposed the compromise amendment.

He didn’t get his $ 50 billion defense spending amendment, so he’s against everyone else. Unless you change your mind, that’s it. compromise amendment is dead.

Sincerely, you will be retiring at the end of this period.

– Jake Chervinsky (@jchervinsky) August 9, 2021

Senator Cruz then stood up to offer his own amendment, which would completely affect the original cryptocurrency provision, to the unanimous consensus. Senator Shelby then asked that his amendment be included in the Cross Amendment; Senator Cruz said no, he wanted a “fair vote.” Shelby later opposed Cruz’s amendment, closing any debate on the matter in the Senate for now.

Senate is expected to vote on the bill on Tuesday. If the bill is approved by the Senate, it will go to the House of Representatives.

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Editor’s Note: This story was updated after publication to provide more details on the Senate proceedings for the day.

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