Incoming US House Financial Services Committee Chairman Patrick McHenry wants the Treasury Department to delay implementation of a section of the Infrastructure Investments and Jobs Act that deals with digital assets and tax collection.

McHenry sent a letter on December 14 to US Treasury Secretary Janet Yellen with questions and concerns about the scope of Section 80603 of the law. In the letter, he asked for clarification on the “poorly drafted” potentially privacy-compromising section dealing with taxes on digital assets, which is set to go into effect next year.

This section, he said, requires the government to treat digital assets as equivalent to cash for tax purposes, which could “compromise” Americans’ privacy and affect innovation.

The section, called “Reporting Information to Brokers and Digital Assets,” requires brokers to report certain information related to dealings with digital assets to the Internal Revenue Service (IRS).

McHenry argues that the section is poorly worded and that the term “brokers” can be “misinterpreted” as applying to a wider range of people and companies than is intended.

The law contains a provision that requires individuals or entities involved in a trade or business to report to the IRS any digital asset transactions exceeding $10,000.

That requirement was challenged earlier this year by Coin Center, a nonprofit advocacy group focused on blockchain technology, which sued the Treasury Department arguing that the rule would impose a system of “mass surveillance” on US citizens.

Related: Sens. Warren & Marshall Introduce New Cryptocurrency Money Laundering Legislation

According to the Fordham International Law Journal, the department is likely to impose reporting requirements on major cryptocurrency exchanges that already contain user information, including customer names, addresses, and social security numbers.

McHenry acknowledged that it was a positive step forward to see the Treasury Department stipulate that “assistant parties” should not be subject to the same reporting requirements as brokers.

In February, US Senator Rob Portman tweeted a letter from US Assistant Secretary of State for Legislative Affairs Jonathan Davis that made it clear that parties such as crypto miners and developers are not subject to the new legislation.

McHenry’s letter concluded by asking the Treasury to publish the rules “immediately” under oath and delay their effective date to give market participants time to comply with any new requirements.

This is the second letter McHenry has sent to Yellen this year, after he sent her a letter on Jan. 26 urging the Treasury secretary to clarify the definition of a broker.

Source: CoinTelegraph

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