Senate Passes Infrastructure Bill Including Language On Digital Assets And Reporting Of Crypto Transactions

On August 10, 2021, the U.S. Senate passed an infrastructure bill containing explicit rules to be inserted into the Internal Revenue Code regarding digital assets. The passage marks the first time that language on this topic has been included in an infrastructure bill. The bill now heads to the U.S. House of Representatives, which is expected to consider it sometime this fall.

The bill defines "digital assets" broadly as "any digital representation of value which is recorded on a cryptographically secured distributed ledger or any similar technology as specified by the Secretary." It requires that certain persons involved in the digital asset ecosystem be treated as "brokers" for purposes of reporting requirements under section 6045 of the Code. Any person treated as a broker is required to file information returns about its customers to the Internal Revenue Service (IRS).