Bitcoin Miners May Be Exempt From IRS Reporting Rules, Suggests US Treasury

On Friday February 11th, The U.S. Treasury Department sent a letter to a group of senators signaling what it expects from crypto miners regarding IRS reporting rules.

According to the letter, written by assistant Treasury Secretary for Legislative Affairs, Jonathan Davidson, it looks like miners may not face the same tax reporting obligations that crypto exchanges do, which is fantastic news.

The letter addresses sticking-point concerns from the crypto industry regarding 2021’s Infrastructure Investment in Jobs Act, and how it would impose undue tax reporting and information gathering burdens on crypto miners.

Since miners don’t typically deal directly with individual customer data and are not ‘brokers”, the Treasury now says they may be exempt from collecting detailed information on customers and trades, as required of exchanges.

The current rule in the 2021 Act seemingly defines every servicer involved in cryptocurrency transactions as brokers, regardless of the type of operations they perform. Obviously, burdening cryptocurrency miners with customer data accumulation and reporting is costly and likely unnecessary.

But now, in The Treasury Departments view, “ancillary parties who cannot get access to information that is useful to the IRS (Internal Revenue Service) are not intended to be captured by the reporting requirements for brokers.”

Plainly stated, crypto miners may be able to operate with a separate, streamlined set of reporting rules. Perhaps far simpler than those required of brokerages and exchanges.

The letter from the Treasury, while not official decree, moves the industry a step closer to formal reporting guidance. More revisions, conversations and details will be needed to be worked out before it becomes official tax reporting policy.

Should Bitcoin and other cryptocurrency miners be exempt from the heavy-handed reporting requirements, an entire layer of bureaucracy, and the associated costs, may not be necessary.

This alone could save miners perhaps tens-to-hundreds of thousands of dollars in accounting and reporting costs.

Read on, HERE