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McHenry, Torres reintroduce crypto tax reform bill

News: A bipartisan group of lawmakers will revive a push today to reform crypto tax reporting provisions that date back to 2021’s bipartisan infrastructure law.

The primary focus of the Keep Innovation in America Act, co-led by House Financial Services Committee Chair Patrick McHenry (R-N.C.) and Rep. Ritchie Torres (D-N.Y.), is narrowing the definition of a crypto “broker” for tax purposes. It’s a tweak to crypto regulations first introduced and passed through the Infrastructure Investment and Jobs Act.

When the infrastructure bill’s text became public in 2021, the crypto sector was shoved into its first major political fight – a fight they’d eventually lose. Advocates said at the time that the law’s treatment of digital assets would saddle non-financial firms – such as crypto miners and certain software providers – with “impossible-to-fulfill reporting requirements.”

The revived crypto bill from McHenry and Torres would address that and also go further by sharply limiting the federal government’s ability to define what a “digital asset” is. The IIJA gave the Treasury Department broad discretion to define crypto, and the Keep Innovation in America Act would limit that power

McHenry said in a statement that the bill would rectify “misguided policy and regulatory overreach [that] threatens to push this dynamic industry – and its potential benefits – overseas.”

Torres, one of the crypto sector’s top Democratic allies on Capitol Hill, said it would provide “much-needed legal and regulatory clarity to help cement our continued place as the global leader in crypto technology and innovation.”