The digital currency community is fighting against restrictive digital currency laws in the court. Coin Center, a Washington D.C.-based digital currency lobby organization, has filed a lawsuit against the U.S. Treasury Department and the Internal Revenue Service (IRS).
Coin Center is contesting a tax reporting requirement contained in the Infrastructure Investment and Jobs Act signed by President Joe Biden in 2021. According to a statement by the think tank, the provision being contested is the 6050I amendment.
The tax law amendment would require individuals and businesses that receive $10,000 or more in digital currencies to collect and report the name, date of birth, and social security number of the sender to the government.
“There is one provision in the infrastructure bill that is unconstitutional on its face and that simply can’t be fixed through regulation. It is the so-called 6050I amendment, and it will require individuals and businesses who receive $10,000 or more in crypto to report to the government not just the name of who sent them the funds, but that person’s date of birth and Social Security number as well,” the statement read.
Coin Center maintains that the requirements violate the Fourth Amendment Rights. The law will force ordinary American citizens to “collect highly intrusive information about other ordinary people, and report it to the government without a warrant,” it added.
Coin Center also states that the law will activate the “chilling effect” on politically active organizations. It would demand that such organizations create and report lists of their donors’ names and identifying information.
The lawsuit names Treasury Secretary Janet Yellen, IRS commissioner Charles Rettig, and U.S. Attorney General Merrick Garland as the defendants. The plaintiffs include Dan Carman of Coin Center and Raymond Walsh of block reward mining company Quite Industries Corp.
The controversial U.S. Infrastructure Bill
The Infrastructure Bill, which will go into effect in 2024, has been the subject of public outcry from the digital currency community since its introduction last year. The bill caused a meltdown in the market at the time as lobbyists and digital currency-friendly legislators rallied around to have its most controversial provisions amended.
The amendment efforts fell through with the bill containing provisions that the community considers “unworkable,” according to a CNBC report. However, the community is not relenting in softening the laws before 2024.
Efforts in this direction have led to the Treasury Department conceding that the definition of “brokers” contained in the bill will not include block reward miners, stakers, and coders. A lot of ambiguity remains for DeFi.
Watch: U.S. Congressman Patrick McHenry on Blockchain Policy Matters with Bitcoin Association’s Jimmy Nguyen
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