Posted 9 months ago | by Catoshi Nakamoto

Coinbase’s global tax Vice President has expressed outrage at Congress for a rushed Infrastructure Bill with a controversial crypto tax tied onto it, which the VP of tax says could affect “60 million Americans or 20% of the U.S. population.”

AdobeStock 286664985 Editorial Use Only Coinbase’s Global Tax VP Expresses Outrage At Congress For Rushing Infrastructure Bill With Crypto Provisions Through The Senate

Coinbase’s Global VP of tax, Lawrence Zlatkin bashed lawmakers for “‘at the last minute” adding tax cryptocurrency stipulations. Zlatkin further stated that the rushed bill would cause issues for “60 million Americans.”

Zlatkin expressed discontent with lawmakers’ decision to try and use the cryptocurrency industry to pay for their bipartisan bill in a blog post highlighting an Aug.19th article published in Bloomberg that praised the infrastructure bill’s crypto tax requirements. Zlatkin added by rushing the bill through so fast there was no ability for protest, estimating that a total of 1/5th of the U.S. population are invested in digital assets:

“Today, around 60 million Americans own crypto, roughly one-fifth of the entire U.S. population. Those Americans, and the entire crypto ecosystem, deserve more dialogue than midnight provisions inserted at the last minute.”

However, Zlatkin noted there was still a small “public outcry” with nearly 80,000 people contacting their elected officials within “just days.”

The high-ranking Coinbase tax authority additionally highlighted the broad definition being used for digital asset “broker” echoing previous outcries about the term. Zlatkin stated that if the bill were to become law, network validators and software developers would be forced to do something impossible which would threaten their existence.

“As long as the statute says that software developers, miners, stakers must do the impossible, there is no lawyer who would advise them to risk operating in violation of laws whose penalties for non-compliance would easily bankrupt them,” Zlatkin said.

He added:

“This will harm innovation and stifle the potential of a hugely important technology at its earliest stages of development […] Tax policy should be thoughtful and deliberate. Broad overreach is a regulatory mistake.”

Zlatkin highlighted a key contradiction between the law that lawmakers were trying to push for digital asset brokers arguing that exchanges should be subjected to the same third-party tax reporting requirements as brokerage firms.

The bill in question passed the Senate without any revisions made to the crypto provisions intended to fund U.S. transportation and infrastructure, as Bitboy Crypto reported. However, many people in the industry and Congress have been working together to change the bill’s language. Zlatkin offers four different suggestions for how he believes we should implement crypto taxes.

These are:

  1. “Brokers” of digital assets should be defined as it is understood in the real world today. It is well established that the predominant number of crypto transactions occur with brokers. If Congress decides that it must create a new definition of “broker” within the infrastructure bill for “digital assets,” then it should define brokers as persons who act as middlemen for compensation, with customers as counterparties. This is a traditional definition of broker and would cover entities like Coinbase.
  2. Propose regulations to define the parameters of tax information reporting for crypto. We would welcome the rules of the road so that we can have a meaningful discussion on how it should be introduced and applied in the real world. The IRS has this authority today.
  3. Hold hearings in Congress on tax oversight for crypto so that there is robust debate on the issue. Today, around 60 million Americans own crypto — roughly one-fifth of the entire U.S. population. Those Americans, and the entire crypto ecosystem, deserve more dialogue than midnight provisions inserted at the last minute.
  4. We should not draft legislation that focuses on crypto ghosts that don’t exist now and have no roadmap to exist in the future. If we focus our laws on problems that don’t actually exist, we will erode America’s leadership in crypto. Why chill the industry in its infancy and send it (and the taxes associated with it) offshore?

America’s largest U.S. exchange stated through both its VP of tax compliance Zlatkin and founder Brian Armstrong that the company agrees there is a need for reporting tax information to the Internal Revenue Service (IRS). “We want people to pay all taxes required under the law. We are building systems and protocols for information reporting in response,” Zlatkin said. Adding, “While we continue to wait on Congress and the IRS to act, we will do our best to provide our customers with the information they need to comply with their personal reporting obligations.”

Bitcoin is currently trading at {FIAT: $50,164.51] UP +2.2% in the last 24 hours according to Coingecko at the time of this report.

About Catoshi Nakamoto

c6ea0c3794492f30883e516d39b2597a?s=90&d=blank&r=g Coinbase’s Global Tax VP Expresses Outrage At Congress For Rushing Infrastructure Bill With Crypto Provisions Through The SenateActivist/Journalist, former writer - We Are Change, The Mind Unleashed, Coinivore, others. Currently writing for - Activist Post and Bitboy Crypto. Not Right or Left Apolitical. I Care About Truths (CATS.) Cryptocurrency enthusiast, I mined and lost 100+ BTC in 2010-2011. I work with - Bitboy, SoMee, CEEK, Presearch, and W3BT aka FMW Media Group. Friend of mostly everyone who isn't a dick. Just A Cool Cat.