On the evening of November 15, 2017, Representative Jared Polis (D-Colorado) offered the Cryptocurrency Tax Fairness Act (previously reported on by ETHNews) as an amendment to the House tax reform bill. Co-sponsored by Representative David Schweikert (R-Arizona), the act would create a de minimis exemption for any cryptocurrency transactions below $600, relieving consumers of “burdensome reporting requirements.” Also requiring the Treasury Department to issue guidelines for informational reporting on cryptocurrency transactions for which capital gains is due, the Act would be “effectively revenue neutral,” said Representative Polis.
“I assure you, Mr. Chair, many [cryptocurrency] purchases are happening today,” said Representative Polis, “but many of the taxpayers that are doing so are taking on the risk [of], or perhaps even formally violating our tax code – or [they are] at least in a gray area.”
He continued, “We need to modernize the 2014 IRS decision that classifies cryptocurrency as property, subject to capital gains tax and reporting requirements.” Comparing cryptocurrencies to credit cards, Representative Polis explained that the “common sense, bipartisan amendment” would “allow for online payments without incurring tax liability for the consumer.”
Cryptocurrency research and advocacy group Coin Center has been instrumental in the effort. “That [Representatives Polis and Schweikert] recognized this issue, introduced a bill, and got it this far means a lot and it shows the IRS that many in Congress believe that the existing tax treatment of cryptocurrencies needs to be updated,” wrote Coin Center’s executive director Jerry Brito.
“The bill’s language didn’t make it into the larger tax reform bill, but that doesn’t mean the bill itself is dead,” he added. “It’s alive and well and we will continue to advocate for its passage by Congress, and we’ll continue to work to try to have the IRS adopt as much of it as it might be able to through rulemaking. For an ecosystem that is barely a decade old to get this far in Congress is remarkable, and we’re only just starting.”
At Devcon3, Coin Center recently provided a regulatory update and Brito highlighted the organization’s work with the Congressional Blockchain Caucus, which is co-chaired by Representative Polis and Representative Schweikert.