Plans are ongoing to introduce new bills in the lower chamber of the legislative arm endorsing operations of blockchain technology and the virtual currency industry.
U.S Representative for Minnesota’s 6th Congressional District, Thomas Emmer made this known following the announcement of three blockchain-centered bills on Friday. He disclosed his intention of introducing the bills into Congress as the weeks unfold. The multi-pronged bills address a broad range of attendant issues within the burgeoning blockchain industry. This includes efforts aimed at developing the industry, spurring operations of miners and setting up regulatory measures for the swift remission of virtual currency related taxes.
The press release gave insight on how these bills aim at providing the support required for stimulating the growth of the budding industry.
In the words of Emmer:
“The United States should prioritize accelerating the development of blockchain technology and create an environment that enables the American private sector to lead on innovation and further growth.”
He also emphasized the need for lawmakers to latch onto the potentials of the novel technology by formulating policies enhancing its growth.
Bills to Provide Leeway in the Crypto Industry
Providing an enabling environment is of the essence, and as such, the core of the bills will focus more on the regulatory measures within the industry especially as it positively influences both developers and users in bringing their initiatives to the bear. In other words, the primary aim of these bills is to foster the building, mining and exchange of cryptocurrencies within the market space.
The United States has been among the forerunners when it comes to the use of cryptocurrencies. In the bid to consolidate the innovations seen over the years, the first bill “expresses support for the industry and its development” within the U.S by advocating for “a light touch, consistent and simple legal environment.”
As part of efforts to reinforce the exclusion of cryptocurrency miners from the Bank Secrecy Act’s (BSA) definition of a money transmitter, the second bill is focused on upholding the ruling of the US Financial Crimes Enforcement Network which does not recognize miners as money transmitters. Thus, cryptocurrency miners are not expected to register as money transmitters since they “never take control of consumer funds.”
Mini-signature wallet providers will be covered in the second bill going by the nature of their services which allow users to control their personal online shopping information.
There could be cases when the protocol undergoes a radical change and thereby validating blocks or transactions that were previously rendered invalid or vice-versa. The third bill seeks to create a “safe harbor” to ensure taxpayers do not bear the brunt of cryptocurrencies resulting from a network hard fork. When passed into law, this bill is expected to protect taxpayers from unwarranted fines levied by the Internal Revenue Service (IRS). When taxpayers report gains from tokens, they are often confronted with levies which might be deemed controversial since the cryptocurrency scheme is not well-defined.
Congressional Committee Calls for Comprehensive Virtual Currency Tax Strategy
It will be recalled that the controversy surrounding the shrouded cryptocurrency tax codes was addressed in an open letter sent to the Internal Revenue Service (IRS) by the Congressional Committee on Ways and Means on May 17, 2017.
The Committee pointed out the need for the tax collection body to clarify the codes to afford investors with the foresight they require to thrive in the industry. While addressing this malaise over a year later, legislators are still not pleased with whatever reforms might have been put in place to relieve taxpayers of the burden they undergo in remitting capital gains taxes on their cryptocurrencies.
“… the IRS continues to expand its enforcement activities without issuing any further guidance on taxpayers. We, therefore, write again today to strongly urge the IRS to issue updated guidance, providing additional clarity for taxpayers seeking to better understand and comply with their tax obligations when using virtual currencies,” the letter stated.
Buttressing the importance of their recommendation, the legislators referred to efforts made by other organizations that have joined the discourse for the same push. These organizations include the Association of International Certified Professional Accountants, the American Bar Association and the Treasury Inspector General for Tax Administration. These organizations have also impressed the need for IRS “to develop a comprehensive virtual currency tax strategy.”
To this end, it is hoped that the agency will make the necessary modifications on or before October 17, 2018.