Cryptocurrency advocacy group Coin Center has provided suggestions for United States lawmakers to consider in potential legislation related to the taxation of digital assets.
In an Aug. 21 letter to Sens. Ron Wyden and Mike Crapo, Coin Center pointed to the Virtual Currency Tax Fairness Act — a bill previously introduced in other sessions of Congress — for provisions, including having the Internal Revenue Service (IRS) establish a de minimis exemption for crypto transactions. The measure could be aimed at encouraging crypto as a method of payment by treating digital asset transactions like ones used to purchase foreign currency.
Secondly, the advocacy group called for lawmakers to consider not applying U.S. tax law reporting requirements for second parties to digital assets. According to Coin Center, a crypto user in the United States could be legally required to provide “incomplete or non-existent” information on senders of digital assets, creating privacy concerns and an undue burden on filers.
“[F]orcing ordinary people to collect highly intrusive information about other ordinary people, and report it to the government without a warrant, is unconstitutional under the Fourth Amendment,” said Coin Center. “[D]emanding that politically active organizations create and report lists of their donors’ names and identifying information to the government is unconstitutional under the First Amendment.”
Other suggestions for Wyden and Crapo to consider included revising the IRS definition of a broker to explicitly exclude crypto miners and Lightning node operators, among others, as well as limit the agency’s authority to issue legal summons for alleged tax evaders. The advocacy group cited a 2016 case in which the IRS issued a subpoena to Coinbase with a “John Doe” summons, allowing the agency to gain a large amount of user data from individuals who may not have been involved in any potential tax reporting violations.
Coin Center added on the matter:
“If we set a precedent that merely dealing in bitcoin could result in a firm’s customers easily losing their financial privacy, it would have severe consequences for bitcoin and the related blockchain ecosystem.”
According to Coin Center, the IRS also needed to consider providing guidance on block rewards, airdrops and hard forks for tax purposes and not require a qualified appraiser for certain donations made in cryptocurrency. The suggestions followed a July request from the U.S. Senate Financial Services Committee, which will be accepting responses on crypto tax guidance through Sept. 8.
Addressing the tax gap — the amount of taxes owed versus those actually paid to the government — has been an ongoing issue in the U.S. as the crypto space expands. Though some legislation, including the bipartisan infrastructure bill passed in November 2021, has attempted to address some of the issues surrounding taxes on cryptocurrency, critics of the legislation have pointed to seemingly impossible reporting requirements for retail investors.
Canterbury MP Rosie Duffield has resigned from the Labour Party.
The 53-year-old MP is the first to jump ship since the general election and in her resignation letter criticised the prime minister for accepting thousands of pounds worth of gifts.
She told Sir Keir Starmer the reason for leaving now is “the programme of policies you seem determined to stick to”, despite their unpopularity with the electorate and MPs.
In her letter she accused the prime minister and his top team of “sleaze, nepotism and apparent avarice” which are “off the scale”.
“I’m so ashamed of what you and your inner circle have done to tarnish and humiliate our once proud party,” she said.
Since December 2019, the prime minister received £107,145 in gifts, benefits, and hospitality – a specific category in parliament’s register of MPs’ interests.
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Ms Duffield, who has previously clashed with the prime minister on gender issues, attacked the government for pursuing “cruel and unnecessary” policies as she resigned the Labour whip.
She criticised the decision to keep the two-child benefit cap and means-test the winter fuel payment, and accused the prime minister of “hypocrisy” over his acceptance of free gifts from donors.
“Since the change of government in July, the revelations of hypocrisy have been staggering and increasingly outrageous,” she said.
“I cannot put into words how angry I and my colleagues are at your total lack of understanding about how you have made us all appear.”
Ms Duffield also mentioned the recent “treatment of Diane Abbott”, who said she thought she had been barred from standing by Labour ahead of the general election, before Sir Keir said she would be allowed to defend her Hackney North and Stoke Newington seat for the party.
Her relationship with the Labour leadership has long been strained and her decision to quit the party comes after seven other Labour MPs were suspended for rebelling by voting for a motion calling for the two-child benefit cap to be abolished.
“Someone with far-above-average wealth choosing to keep the Conservatives’ two-child limit to benefit payments which entrenches children in poverty, while inexplicably accepting expensive personal gifts of designer suits and glasses costing more than most of those people can grasp – this is entirely undeserving of holding the title of Labour prime minister,” she said.
Ms Duffield said she will continue to represent her constituents as an independent MP, “guided by my core Labour values”.