Biden Administration Pushing for Foreign Tax Reporting in Reconciliation Budget Bill

The Biden White House wants a crypto version of the G20’s ‘Common Reporting Standard’ in order to sniff out tax dodgers in the crypto world

article-image

Source: Shutterstock

share

key takeaways

  • Two bills are currently in play: a $3.5 trillion reconciliation bill and a $1.2 trillion infrastructure bill
  • The budget bill is currently going through a reconciliation process, a rare parliamentary procedure that makes it filibuster proof

Reports say that the White House is looking to create a framework to force US-based crypto exchanges to share information about non-US users in order to entice foreign registered crypto exchanges to share information on US-users. 

A similar scheme already exists in the tradfi world called the Common Reporting Standard. This obliges banks in G20 member countries to collect information on foreign account holders and pass it back to tax authorities in that person’s home country. In the crypto world, US officials believe Americans are hiding their crypto gains on offshore exchanges and would like this information from the host countries and in exchange will give up information on foreign accounts operating at US exchanges. 

Language that would allow for this type of reporting is currently not present in the $3.5 trillion budget framework that is being presented as a reconciliation bill, but the White House is pushing to add it.

A reconciliation bill is a rare parliamentary procedure that makes legislation filibuster proof by allowing for it to pass with only a majority. However, this can only be used for bills pertaining to taxes, spending and the debt limit with a limit of twice in a year.  

All this is in contrast to the $1.2 trillion infrastructure bill which contained tax reporting requirements that blockchain industry stakeholders said were “impossible-to-fulfill.” The Senate failed to pass an amendment that would narrow the scope of the blockchain component of the bill.

“At this point, given procedures agreed-upon in the Senate and House, it’s highly unlikely we’ll see changes to the digital asset payfor in the infrastructure bill.” Jackson Mueller, director of policy and government relations at Securrency, told Blockworks in an interview. “The big question is what, if any measures, will be included, and whether the legislative language will generate as much, if not more, uncertainty as to which entities and accounts are included in the IRS’ tax orbit compared to the controversy generated over the digital asset payfor in the infrastructure bill.”

Mueller expected some sort of tax compliance measures to be coming down the legislative pipe, but is not a fan surprise legislative add-ons. 

“What stakeholders received from the infrastructure bill — and what they could receive, yet again, in the budget reconciliation package — is the last-minute insertion of additional tax compliance measures without providing the American public with the opportunity to respond,” Mueller said. “No matter your thoughts on what tax treatments should be applied to the crypto industry, this rushed, back-stage process is simply bad policy.”


The price of bitcoin doesn’t seem to be impacted by the coming proposed tax changes, and is currently up 2.7% during the past 24 hours according to CoinGecko.

Want more investor-focused content on digital assets? Join us September 13th and 14th for the Digital Asset Summit (DAS) in NYC. Use code ARTICLE for $75 off your ticket. Buy it now.

Tags

Upcoming Events

Javits Center North | 445 11th Ave

Tues - Thurs, March 18 - 20, 2025

Blockworks’ Digital Asset Summit (DAS) will feature conversations between the builders, allocators, and legislators who will shape the trajectory of the digital asset ecosystem in the US and abroad.

recent research

Research Report Templates (1).jpg

Research

With $13B in tokenized assets, strong institutional partnerships, and a clear first-mover advantage in the RWA space. The platform's methodical approach to regulatory compliance, coupled with its hybrid public-private architecture, positions it uniquely to capture significant market share in the emerging tokenization landscape. While current fee generation primarily stems from metadata transactions, the planned launch of Figure Markets, major exchange listings, and comprehensive market-making initiatives in 2025 could serve as powerful catalysts for growth.

article-image

Perena is built on the premise that as stablecoins proliferate, liquidity could fragment, and stablecoins aren’t useful if they aren’t liquid

article-image

From hackathons to trading tools and DAO governance, AI agents are redefining how we build and innovate

article-image

CME’s large bitcoin contracts are so big that investors are turning to micro bitcoin contracts

article-image

The third-largest stablecoin is going multichain for the first time in its seven-year history

article-image

Nano Labs’ news release notes confidence in bitcoin being “a reliable store of value amidst its rising global adoption”

article-image

Several big companies report third quarter earnings this week, likely moving markets