The undersecretary of the United States Department of the Treasury for legislative affairs, Jonathan Davidson, points out that Bitcoin miners located in this country do not need to be accountable to the United States Tax Collection Service (IRS, according to its acronym in English) as if they were exchanges or brokers.
Davidson’s observation reached the hands of a group of US senators through a letter that he himself sent last Friday, February 11. In it, the official presents his concerns regarding the fiscal responsibilities of those who are dedicated to mining and stake of cryptocurrencies.
The letter It reads that, according to the Treasury Department, “subordinate parties that cannot access information that is useful to the IRS are not subject to the reporting requirements established for broker-dealers.”
According to the statement cited by Davidson, Bitcoin miners and cryptocurrency stakers they will not be obliged to comply with the tax requirements that will be demanded from the exchanges of cryptocurrencies.
It is important to mention that, in August 2021, the US Senate approved the Infrastructure Law (Infrastructure Bill). According to what CriptoNoticias reported at the time, this law defines cryptocurrency exchanges and miners, among other niche actors, as transmitters of value exchanges and are required to pay taxes for that activity. In addition to this, this law also requires them to collect, and make available to the IRS, data on the users of their services.
Bitcoin miners don’t fit into the US Infrastructure Act
Most members of the United States Senate did not take into account the comments made by Cynthia Lummis and other senators when passing the Infrastructure Act.
Lumis proposed an amendment that intended to correct the definition of a broker or stockbroker, in order not to refer to miners, nodes, developers and other members of the bitcoiner community. However, the amendment was not taken into account and the Law in question was approved, which will enter into force in 2024.
The concerns raised by the Treasury Department are consistent with Senator Lumis’ perspective.
For Bitcoin miners and cryptocurrency stakers, the process of collecting information from their users is much more cumbersome, if not impossible. While for exchanges it is a more routine procedure, since it has tools developed for it.
Another definition that will be reviewed by the United States Department of the Treasury is that of digital assets and, in turn, will be contrasted with that of traditional stock securities.
Poorly Structured Regulations Can Cost the IRS Money
CriptoNoticias reviewed a recent case in which a couple sued the IRS for the unfair collection of taxes related to their staking activities on the Tezos network, a platform focused on building applications.
The Jarrett couple allege that the tokens they have obtained are property created by the contributors and they cannot be taxed, unless they are sold or exchanged. The IRS offered a refund of the taxes paid by the plaintiffs. However, the Jarrets did not accept the agreement proposed by the government entity, since they demand the inclusion of compensatory expenses for lost profits.
The judicial resolution of the case is in process and may arrive between March of this year and March 2023.