Episode 2 of season 4 of The Scoop was recorded remotely with Aislinn Keely and Justin Woodward of The Block, tax lawyer and co-founder of TaxBit and Seth Wilks, Senior Director of SMB & Government Relations, TaxBit
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Last year, cryptocurrency issues took center stage in an ongoing debate over the US government’s trillion-dollar infrastructure bill.
The Infrastructure Investment and Jobs Act offered a variety of ways to pay for its planned projects, including an increased focus on crypto tax reporting. The Internal Revenue Service (IRS) has long teased unified broker reporting for exchanges, which means entities that fall under the definition of broker will be required to report information and send tax forms to the IRS. . The infrastructure bill made it official: broker reporting is coming in 2023.
But some worry that the bill’s definition of a “broker” is too broad and could encompass entities that cannot reasonably report to the IRS, such as miners or decentralized financial entities (DeFi). The main amendments to clarify this definition did not pass, and it is now up to the Treasury to clarify the term “broker” in its next directives.
In this week’s Policy Scoop, Aislinn Keely of The Block dives into the current landscape of crypto tax reporting and how the upcoming guidelines could affect taxpayers.
Keely spoke with Justin Woodward, tax attorney and co-founder of TaxBit, and Seth Wilks, senior director of small business and government relations at TaxBit about:
- The historical context of the long-awaited broker reporting guidelines and their importance.
- What is likely to be in the guidelines and why is it likely to affect centralized exchanges first.
- When will it take effect and what might it look like.
- How the IRS thinks about DeFi and non-fungible tokens.
© 2021 The Block Crypto, Inc. All rights reserved. This article is provided for informational purposes only. It is not offered or intended for use as legal, tax, investment, financial or other advice.