• Wallet operators and miners do not have to comply with IRS reporting requirements
  • The treasury will bring more clarity on the definition of “broker” 
  • ​Miners and wallet operators are not considered as “brokers”

In what appears to be a huge legal victory for crypto enthusiasts and campaigners, the U.S. Treasury has recently hinted that crypto miners and other "ancillary parties" would be exempt from tax-reporting requirements.

This is being seen as a favorable development concerning the contentious crypto-tax provisions in President Joe Biden's $1 trillion infrastructure plan, which was passed into law in November, requiring crypto market participants to report to the Internal Revenue Service (IRS) any digital asset transactions worth more than $10,000.

The U.S. Treasury hinted in a letter to a group of senators late last week that it intends to exclude crypto miners, stakers, and other market players from laws that would force crypto brokers to share data on their customers' transactions with the IRS.

According to the letter, under a new amendment, miners, stakers and other market players would no longer be designated as "brokers." This implies that these market participants will no longer be compelled to provide data on their clients' transactions to the IRS.

Treasury Assistant Secretary for Legislative Affairs Jonathan Davidson stated in the letter that "ancillary parties who cannot get information valuable to the IRS are not expected to be caught by the reporting requirements for brokers."

Davidson further stated that crypto validators are "unlikely to know if a transaction is part of a sale." In addition, he verified that organizations providing services linked to hardware or software crypto wallets "do not engage in broker operations."

Senator Rob Portman announced the news on Twitter, stating,
“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.”

According to the letter, the Treasury would also assess "the degree to which other players in the digital asset market, such as centralized exchanges and those sometimes labeled as decentralized exchanges and peer-to-peer exchanges, should be recognized as brokers."

According to Bloomberg, the Treasury intends to submit draught rules that would include its position on the broker definition.

Miners exempted from IRS reporting provisions
Miners exempted from IRS reporting provisions Pixabay