Originally written by Laura Davison And MacKenzie Hawkins with Accounting Today
A change to cryptocurrency reporting rules in the infrastructure bill was blocked in the Senate Monday, leaving language for broad oversight of virtual currencies still in the legislation that’s set to pass the Senate.
The amendment was designed to address concerns from the cryptocurrency industry that the original bill would require entities, like miners and software developers, to report tax data to the Internal Revenue Service that they didn’t have access to. The change was proposed after days of negotiations between three Republicans — Pat Toomey, Cynthia Lummis and Rob Portman — and two Democrats, Mark Warner and Kyrsten Sinema.
The amendment’s failure represents a blow to the crypto industry, which had pushed hard in recent weeks for more narrowly targeted oversight. Portman has said there are other ways to clarify the bill’s language, including Senate floor speeches to show the lawmakers’ intent and additional guidance from the Treasury Department. Lummis said Congress will have to revisit the issue.
“All that means is we’re gonna have to fight this another day because it’s important that the Congress define these terms and create a level playing field,” Lummis said in an interview. “Going forward this fall we’re gonna have to be much more proactive about defining terms in this space so people can still innovate.”
The infrastructure bill, and the crypto language, are still a distance from becoming law. The legislation has to be taken up by the House, where changes could be made.
Kristin Smith, executive director of the Blockchain Association, said in a statement that the trade group and its member organizations will be “engaging with members of the House of Representatives to ensure the unclear and unworkable aspects of this provision are removed once and for all.”
Republican Senator Richard Shelby sought to include with the crypto provision his amendment for $50 billion in additional military construction money — a poison pill for Democrats. Senator Bernie Sanders, a Vermont independent, objected to Shelby’s provision, and Shelby refused to consent to the crypto change without the military funds.
“Because there’s a difference of opinion on whether or not the senator from Alabama should get a vote on his amendment, because that is not agreed to, the body is refusing to take up an amendment that has broad bipartisan support,” Toomey said on the Senate floor. “In what universe does this make any sense?”
Disagreement over which amendments to consider, including those targeting crypto, has bogged down the infrastructure debate process for days, and no additional changes are likely to be made to the bill before passage in the Senate.
The Senate is wrapping up debate on the $550 billion infrastructure bill and is likely to vote on final passage Tuesday, unless a deal is reached to approve the legislation sooner.