How Will the Infrastructure Investment and Jobs Act Impact Taxpayers?– November 08, 2021 by Cynthia Pedersen

** Updated 11/15/21 **

On November 5, 2021, Congress passed the long-awaited Infrastructure Investment and Jobs Act, which was signed by President Biden on November 15. Below is a look at the two tax-related provisions included in the Act and their potential impact.

1. Crypto Asset Information Reporting

The Infrastructure Investment and Jobs Act is the first time Congress has specifically addressed crypto asset transactions within the Internal Revenue Code. Previous guidance was issued by the IRS in the form of a notice, FAQs and revenue rulings.

The Act expands the definition of a broker responsible for information reporting on the IRS Form 1099-B to include crypto asset transactions. IRS Form 1099-B is currently used to report gains or losses from the sale through a broker of stocks, commodities, regulated futures contracts, foreign currency contracts, forward contracts, debt instruments, options, securities futures contracts, etc. for cash, and is supplied by the broker to the taxpayer that owns the accounts where the gains or losses are recognized. The expanded reporting requirement is an attempt to ensure the IRS receives the information necessary to calculate gain or loss on each crypto asset transaction.

The legislation amends IRC Section 6045 to expand the definition of a broker to include "any person who (for consideration) is responsible for regularly providing any service effectuating transfers of digital assets on behalf of another person." The term digital asset is defined as "any digital representation of value which is recorded on a cryptographically secured distributed ledger or any similar technology as specified by the Secretary."

Additionally, the Act expands IRC Section 6050I(a) to treat digital assets as cash for the purpose of requiring trade or businesses to report to the IRS on Form 8300, Report of Cash Payments Over $10,000 Received in a Trade or Business, when they receive more than $10,000 in one transaction.

The new reporting requirements apply to digital asset transactions occurring on or after January 1, 2023.

>> Cohen insight: The general industry concern with this new reporting requirement is the overly broad application of the broker rules to crypto asset service providers who do not have access to the required information. For example, absent limiting language issued through IRS regulations, it is possible that the information reporting requirements will apply to stakers, validators, miners and developers who generally do not have access to the counterparties information.

Additionally, while the definition of a digital asset is specifically limited to the context of information reporting, it is anticipated that this definition may be used for future tax legislation. This should be monitored because different crypto assets should have different tax treatments based on their underlying purpose. For example, the store of value use for bitcoin is not the same as the value held within a non-fungible token (NFT). However, the term “digital asset” as defined by this legislation, seems to encompass both. Therefore, if future tax legislation applies a blanket treatment to all digital assets without separating the purpose of those digital assets, it may have unintended consequences. 

2. Employee Retention Credit (ERC)

First introduced under the CARES Act in March 2020, the Employee Retention Credit (ERC) is a fully refundable tax credit that benefits eligible employers who have continued to pay employees while experiencing COVID-19 economic or operational difficulties. The credit has been extended more than once — first by the Consolidated Appropriations Act of 2021 and then by the American Rescue Plan Act, 2021, which stretched the credit through December 31, 2021 — all with the intent of allowing more businesses to benefit during difficult economic times.

The Infrastructure Investment and Jobs Act creates an early sunset of the Employee Retention Credit (ERC), removing it from business taxpayers’ toolkit as of September 30, 2021.

>> Cohen insight: While the ERC will not be applicable in Q4 2021 or beyond, if a business has not taken advantage of the credit since its inception in March 2020 through Q3 2021, there is an opportunity to
amend those prior returns and still claim the credit.

Contact Cynthia Pedersen at to discuss crypto asset information reporting, Robert Venables at to discuss the ERC or a member of your service team.

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Cohen & Company is not rendering legal, accounting or other professional advice. Information contained in this post is considered accurate as of the date of publishing. Any action taken based on information in this blog should be taken only after a detailed review of the specific facts, circumstances and current law.