How is the signing of the US Infrastructure Act affecting the blockchain industry?

On the evening of November 5 local time, the United States House of Representatives passed the "Infrastructure Investment and Jobs Act" 228-206, a bipartisan infrastructure bill of 1, $ 2 trillion (7.7 trillion yuan). The Jobs Act (hereinafter referred to as the “Act” or “the Infrastructure Act”) has been submitted to President Biden for signature. This bill has generated a lot of controversy in the cryptocurrency industry because it includes taxes for the cryptocurrency industry. On the day the bill was signed, Bitcoin fell 10% from its recent high.

First, the bill expands the legal terms of “the broker” to “anyone who (essentially pays) regularly provides digital exchange services”.

The result is a regulator that includes all participants in the cryptocurrency industry, not only through Intermediate Exchanges, but also through Trade Exchanges (DEX), which peer-to platforms -peer and unsuspecting (non-peer) platforms such as miners. . All of the above are the responsibility of KYC of their users. In addition, in terms of a “decision” clause, the potential of the “broker” can be extended to participants such as brokers or portfolio developers. You must submit your exchange information to an intermediary, the Internal Revenue Service (IRS).

That's because the $ 1.2 trillion infrastructure project includes $ 550 billion in new spending, and the United States has passed the $ 3.5 trillion budget. The size of these two projects is the biggest controversy in the United States in recent decades, with $ 28 billion of their huge investment coming from cryptocurrency taxes. How to guarantee taxes and tax bases.

(1) Fiat exchange office

The first to be affected is fiat currency trading. The unique functioning of the fiat currency market is for consumers to buy and trade cryptocurrency by opening an account on the digital trading platform and sending US money per person to the platform's account via wire transfer. or electronic payment. Once the transaction is complete, transfer it to your personal bank account or e-wallet in US dollars. Under US law, this template is only required to file and file an 8949 income tax return. Based on the time difference between holdings, it is divided into long-term investments and short-term investments. term. With a consecutive year, the long-term investment is held for more than a year, the investment received less than a year. year Increase in short-term investment - short-term capital income), consumer demand You can save the difference over time. If the gains are too large, you can get 3.8% net income gain due to excess funds at the time of deposit.

After the entry into force of the Infrastructure Act, employees were required to provide their clients with a Form 1099-Mscellanious (hereinafter referred to as “Form 1099”) to understand that the taxpayer's “money” had been Unemployed ". If the broker completes Form 1099 but the IRS finds that the consumer has not filed a tax return, you will receive an automatic CP2000 notice that indicates that your business account has not reported taxable income. Please complete your tax return as soon as possible.

(2) Financial management

Profits and remittances are also taxable. For example, if a consumer exchanges their USDT securities for their Bitcoin holders, this method also requires a tax refund. The IRS may also decide to exchange one cryptocurrency for another as a business transaction, and will also report a portion of the investment income as it is called. At the same time, the IRS has amended the U.S. tax return, which includes questions that require all U.S. taxpayers to answer the question "Did you receive, sell, trade, or throw away virtual currency in 2021?" Is it worth it? "

Failure to respond in good faith is considered a lie.

(3) Commercial products

The third type of cryptocurrency tax collection can be defined as the use of cryptocurrencies in the product. For example, if User A buys Bitcoin for $ 10,000 in 2019, $ 10,000 is the consumer's value. By 2021, the value of Bitcoin will reach $ 50,000 per coin, and consumers will pay in Bitcoin to buy Tesla cars. The tax rate right now is if the commercial value of the car is $ 50,000 and $ 40,000 minus the difference between the presidential value of $ 10,000 is considered annual income and them. A taxi.

(4) Mining

Finally, mining income may also be taxable. The process of creating virtual values ​​is called "mining", which means calculating the next hash value by counting energy. If the miner receives virtual profits from mining, the IRS cryptocurrency mining days will count towards the miner's total income based on the market value of the bitcoin, and the miner will need the earnings. - Tax on self-employment. Electricity bills from mining can be used to reduce costs. Miners should be unlucky The IRS will work with a specialist blockchain analytics company (such as Chainalysis) to directly access information about on-chain exchanges.

In order to comply with IRS notices, businesses are required to collect information about customers, including names, addresses, and phone numbers. This means that the broker will have to prove KYC on their clients. If this can prevent tax exemptions and achieve the goal of raising taxes, on the other hand, not all users have any privacy, and the "distribution" of the entire blockchain budget would be an empty story.

The law was signed by the president, but the issue of the “employees” decision in the construction bill has not been finalized and there may be a narrow interpretation of its further use. Senate Finance Committee Chairman Democratic Congressman Ron Wyden from Oregon and Republican Senator Cynthia Lummis from Wyoming are still struggling to reduce the tax burden on cryptocurrency tax data as the industry cryptocurrency presents more fiscal policies for the future. However, strict international tax laws are clearly still there.