Episode 2 of Season 4 of The Scoop was recorded remotely with The Block’s Aislinn Keely and Justin Woodward, tax attorney & co-founder of TaxBit and Seth Wilks, Senior Director of SME & Government Relations, at TaxBit
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Last year, cryptocurrency concerns took center stage in an ongoing debate over the US government's trillion-dollar infrastructure bill.
The Infrastructure Investment and Jobs Act proposed a variety of ways to pay for its intended projects, including a heightened focus on crypto tax reporting. The Internal Revenue Service (IRS) has long teased unified broker reporting for exchanges, meaning entities that fall under the broker definition will be required to report information and send tax forms to the IRS. The infrastructure bill made it official: broker reporting is coming in 2023.
But some are worried the bill's definition of a "broker" is too broad and could encompass entities that can't reasonably report to the IRS, like miners or decentralized finance (DeFi) entities. Key amendments to clarify that definition failed to pass, and it's now all on the Treasury to clarify "broker" in its upcoming guidance.
In this week's Policy Scoop, The Block's Aislinn Keely dives into the current landscape of crypto tax reporting and how the coming guidance might affect taxpayers.
Keely spoke with Justin Woodward, tax attorney and co-founder of TaxBit, and Seth Wilks, Senior Director of SME and Government Relations at TaxBit about:
- The historical context of the long-awaited broker reporting guidance and why it matters.
- What will likely be in the guidance and why it's likely to affect centralized exchanges first.
- When it will take effect and what that might look like.
- How the IRS is thinking about DeFi and non-fungible tokens.
© 2022 The Block Crypto, Inc. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.