Crypto Miners Not Bound By Tax Reporting Rules, Says US Treasury

The US Treasury has exempted crypto miners and wallet providers from reporting their income for tax purposes. According to the department, miners, stakers, and a few others will not be bound by IRS reporting rules, leaving only brokers (exchanges) under these rules.

The US Treasury revealed this in a letter addressed to a group of senators, where it announced plans to exclude miners and other market participants, including stakers, from the rules that require crypto brokers to report data on their clients’ transactions with the Internal Revenue Service (IRS).

US Senator Rob Portman shared the news on Twitter, stating in his words, “Appreciate the Treasury Department affirming that crypto miners, stakers, and those who sell hardware and software for wallets are not subject to tax reporting obligations.

Assistant Secretary for Legislative Affairs Jonathan Davidson expressed the department’s position in the letter, noting that ancillary parties who cannot get access to information that is useful to the IRS are not intended to be captured by the reporting requirements for brokers.”

According to Davidson, crypto validators are “not likely to know whether a transaction is part of a sale,” while entities involved in offering services related to hardware or software crypto wallets “are not carrying out broker activities.” While centralized and decentralized exchanges fall into the category of brokers, the Treasury will also have to determine to what extent they should be considered brokers.

There has been much controversy around whether crypto miners and stakers are captured by the term ‘brokers.’ The $1-trillion infrastructure bill signed by President Biden in November 2021 was responsible for this controversy as lawmakers sought clarification on the definition of ‘broker.’

The bill will require crypto market stakeholders to report their crypto transactions above the $10,000 threshold to the IRS. However, crypto stakers, miners, and wallet providers will not need to abide by this requirement following the latest development, except crypto traders.