Washington pro-cryptocurrency Democratic Rep. Suzan DelBene has reintroduced a draft bill to exclude cryptocurrency users from paying taxes on transactions under $200. DelBene had previously co-authored the new bill with her Miami representative, David Scheiker, in 2021.
In a draft bill submitted to Congress called the "Virtual Currency Tax Fairness Act of 2022," DelBene is seeking to amend provisions of the Internal Revenue Code of 1986 to exclude gains from individual transactions in virtual currency. Upon approval, the new bill would stop the Internal Revenue Service (IRS) from requiring U.S. residents to pay taxes on capital gains from cryptocurrency transactions over $200.
“Outdated regulations on virtual currencies fail to take into account its potential for use in our daily lives, rather than treating it as a stock or ETF.”“Virtual currency has evolved rapidly over the past few years and there are increasing opportunities to use it in our daily lives. The U.S. must keep up with these changes and ensure that our tax laws evolve with our use of virtual currencies.”
Although similar versions of the bill were presented to Congress on two different occasions, neither gained support. In 2017, Rep. David Scheiker introduced a bill that would have exempted cryptocurrency transactions under $600 from taxation.
In 2021, lawmakers Scheiker and DelBene co-authored the current version of the same name, lowering the threshold to $200. Pro-cryptocurrency representatives Darren Soto and Tom Emmer co-sponsored the most recent iteration of the cryptocurrency proposal. In commenting on the most recent amendment proposal, Emmer stated.
“As consumers increasingly use cryptocurrencies to complete their daily transactions, we must modernize their tax treatment. This common-sense bill will finally allow Americans to use their digital wallets as seamlessly as they use cash.”
Current U.S. tax law requires cryptocurrency users to pay approximately 20% of their capital gains. However, residents typically do not pay capital gains taxes on their digital asset holdings. The proposed bill suggests that the tax law should apply to transactions made after December 31, 2021. The deadline for residents to pay taxes on cryptocurrencies and statutory income is April 18.