Rep. Patrick McHenry Names Proposed Cryptocurrency Taxation Rules
Date: 2023-08-26 Author: Karina Ziganova Categories: BUSINESS
Patrick McHenry, chairman of the House Financial Services Committee, commented on the newly proposed cryptocurrency tax rules on August 25.
The IRS, along with the US Treasury, proposed these tax rules earlier in the day. The new rules will generally require crypto brokers to report the same tax information as securities and other financial instruments brokers currently do.
McHenry criticized the proposed requirements as overly broad, writing:
“The notice... is another front in the Biden administration's ongoing assault on the digital asset ecosystem. ... Numerous legislators in both parties have made it clear that any proposed rule must be narrow, adapted and clear."
McHenry said the Infrastructure Investment and Jobs Act, introduced by the Biden administration in 2021, requires that kind of clarity in the legislation.
He acknowledged that the proposal was still under consideration, adding that he was pleased to see a delayed effective date and deletions in the text of the proposal.
McHenry went on to urge President Joe Biden's government to "cease its efforts to destroy the digital asset ecosystem" and cooperate with Congress on cryptocurrency legislation.
He also promoted his own bipartisan legislation, the American Innovation Preservation Act, as an alternative. This bill ensures that, for tax reporting purposes, the term "broker" will only cover companies that are brokers of digital assets. This will exclude cryptocurrency miners, node operators, and hardware operators from the broker category.
Bloomberg reports suggest that the IRS and Treasury proposal, by contrast, will include DeFi and NFT platforms, excluding mining and staking companies.
McHenry has a reputation for being a crypto advocate
McHenry, a Republican and U.S. Representative from North Carolina, has built a reputation as a pro-crypto lawmaker. He has supported various other cryptocurrency-related bills, including the Payment Stablecoin Transparency Act of 2023, the Digital Tokens Act of 2021, and the Ransomware and Financial Stability Act of 2021.
McHenry also commented on numerous recent developments in the crypto industry, including PayPal's decision to introduce a stablecoin and the regulatory response to BlackRock's recent bid for a Bitcoin spot ETF.
