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US citizens could soon pay with Bitcoin up to $600 and not face tax reporting
Bitcoin-friendly congressman Jared Polis has introduced legislation that could allow US citizens to pay in cryptocurrency without reporting it for tax.
The Cryptocurrency Tax Fairness Act, a bipartisan effort with Republican David Schweikert, aims to give everyone a $600 leeway to use crypto without needing to submit a tax return to the IRS later.
Bitcoin and virtual currencies are still classed as property in the US, obligating users to report any form of gains or losses on holdings each tax year, regardless of amount.
The issue is especially poignant in 2017, as the US’s largest exchange Coinbase battles the IRS in what consumers and politicians alike have criticized as an “overly broad” tax investigation.
“To keep up with modern technology, we need to remove outdated restrictions on cryptocurrencies, like Bitcoin, and other methods of digital payment,” Polis said in a press release Thursday.
“By cutting red tape and eliminating onerous reporting requirements, it will allow cryptocurrencies to further benefit consumers and help create good jobs.”
Washington is currently home to the Blockchain Caucus, a joint initiative begun in February by Polis aiming to increase education and awareness of virtual currency among the echelons of US politics.
Commenting on the new act, Coin Center CEO Jerry Brito, who worked with Polis on the Caucus, said it would create a “level playing field.”
“We applaud Representatives Polis and Schweikert for their leadership in introducing the Cryptocurrency Tax Fairness Act, which would treat cryptocurrencies similarly to how foreign currency is now treated and relieve users from having to keep track of small personal transactions,” he said.
“Not only will this create a level playing field for digital currencies, it will also help unleash innovation on applications like micropayments, which can consist of dozens of transactions per minute and thus are difficult to square with the current law.”
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