> That means that the IRS will not be able to require that miners, stakers and companies that sell hardware or software for storing digital assets report the activities of their customers or crypto users whose transactions they verify.
> In a statement, Wyden said that “investors failing to pay tax they owe through cryptocurrency is a real problem,” but that the law as previously written was too broad and would have applied to actors who would not have been able to fulfill its mandates.
> The changes will lead to the bill raising $5.2 billion less than the $28 billion envisaged by the initial legislation, according to a Politico report citing the Joint Committee on Taxation.
To me, a layman, it seems that they are trying to allow more loopholes for tax evasion through buying and selling bitcoin in certain ways? Or am I completely off base?
EDIT: Here [0] is the actual ammendment, so it seems maybe it's just protecting people doing development work on cryptocurrency software/hardware from having to pay taxes.. I think
You’re off base. The original definition was putting tax and KYC requirements on people who don’t have, and can’t get, that information. Network nodes facilitate transactions, they don’t broker them. Its like treating an exchanges electricity provider as part of the equity trade.
It’s not tax evasion. The law as originally stated would have crippled the industry in the US.
Devil's advocate for a moment... the definition of a broker is "a person who buys and sells goods or assets for others," or it can mean to "arrange or negotiate" a deal or plan.
How is a miner not a broker then? They accept transactions and then place them on a blockchain by performing some kind of work. Sure, at the moment few if any cryptos are definitely securities, but what is going to happen when a company creates (for example) a wrapped SP500 token? A "traditional" broker can't just trust anyone to record a transaction, there is a lot of regulation.
Will there be a class of tokens that can only be mined by people who can do KYC on them? Why is a miner exempt from caring about what transactions they accept?
> The original definition was putting tax and KYC requirements on people who don’t have, and can’t get, that information.
You fundamentally misunderstand regulation. If someone can’t/won’t do something, regulation is enacted to either compel them or to outlaw their behavior.
Your tacit suggestion that because miners can’t do something means the law is flawed, is akin to saying “oh well burglars won’t pay for the goods so oh well”. If we pass a law that miners can’t follow, then mining becomes illegal. We do this all time, especially in finance.
A more realistic example is “WhatsApp is E2E encrypted so traders can’t be monitored”. This means WhatsApp is a non-compliant (“illegal”) facility to transact in most regulated markets.
I rarely notice politicians, but Wyden is frequently in the fray on the right side of a lot of issues I hear about. Seems like he got this one right, again.
> In a statement, Wyden said that “investors failing to pay tax they owe through cryptocurrency is a real problem,” but that the law as previously written was too broad and would have applied to actors who would not have been able to fulfill its mandates.
> The changes will lead to the bill raising $5.2 billion less than the $28 billion envisaged by the initial legislation, according to a Politico report citing the Joint Committee on Taxation.
To me, a layman, it seems that they are trying to allow more loopholes for tax evasion through buying and selling bitcoin in certain ways? Or am I completely off base?
EDIT: Here [0] is the actual ammendment, so it seems maybe it's just protecting people doing development work on cryptocurrency software/hardware from having to pay taxes.. I think
[0] https://news.ycombinator.com/item?id=28075226