The proposals would require all transactions of $10,000 or more to be reported to the IRS.
U.S. lawmakers are considering tougher tax rules for cryptocurrencies to help offset part of the cost of a bipartisan infrastructure agreement.
According to Bloomberg Law, senators added last-minute crypto tax proposals after weeks of deadlock between Democrats and Republicans.
The expanded tax measures are intended to raise $28 billion, a little more than 5% of the $500 billion planned for a major infrastructure package. The funds would support various transportation and power projects, according to the report.
Lawmakers have asked the Internal Revenue Service (IRS) to tighten its tax enforcement by taking a stricter stance toward firms that offer crypto-focused services and by expanding reporting requirements that currently apply to brokers. Senators also want all crypto transactions of $10,000 or more to be reported to the IRS.
The decision to increase taxes on cryptocurrencies has drawn sharp criticism from across the crypto industry.
The Blockchain Association, which advocates for digital asset adoption in the United States by educating policymakers and opposing what it calls unfavorable regulations, described the plans as “extremely problematic.”
Kristin Smith, the association’s executive director, warned that many firms likely to fall under IRS scrutiny are not equipped to collect the comprehensive data the agency may demand. The Washington, D.C.-based organization said it is pushing on all fronts to get the proposal modified.
Representative Tom Emmer of Minnesota also questioned the Senate’s move, arguing it would only harm ordinary investors and innovators.
“Bottom line: trying to offset the out-of-control spending in the infrastructure package on the backs of everyday crypto investors and innovators will do nothing but leave our country behind,” he wrote on social media.
The congressman vowed to do what he can to support investors and businesses, and some observers are urging him and others to pursue legislation that benefits the sector.
The Senate proposal comes as regulatory scrutiny of cryptocurrencies intensifies worldwide. Several countries have taken strong action against entities such as Binance, Bitcoin, and other digital assets amid allegations of tax evasion and money laundering.