Infrastructure Bill Would End ERC, Increase Cryptoasset Reporting

The ERC was created by the Coronavirus Aid, Relief, and Economic Security (CARES) Act, P.L. 116-136, and amended by the Consolidated Appropriations Act, 2021, P.L. 116-260. The American Rescue Plan Act, P.L. 117-2, enacted March 11, made the ERC available to eligible employers for wages paid during the third and fourth quarters of 2021; however, H.R. 3684 would repeal that extension. The IRS issued guidance last week on claiming the credit in the third and fourth quarters of 2021 (Notice 2021-49), but noted in that guidance that it is watching this legislative development.

Cryptoasset reporting

Section 80603 of the bill imposes new cryptoasset information reporting requirements on brokers. The Sec. 6045(c)(1) definition of “broker” is expanded to include anyone who for consideration effectuates “transfers of digital assets on behalf of another person.” For these purposes, “digital asset” is defined as “any digital representation of value which is recorded on a cryptographically secured distributed ledger or any similar technology.”

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The bill would amend Sec. 6045A to require brokers to provide information returns reporting any transfers of digital assets to accounts that are not maintained by a broker.

Disaster relief

The bill would modify the automatic extension of certain deadlines for taxpayers affected by federally declared disasters in Sec. 7508A, which was enacted in the Setting Every Community Up for Retirement Enhancement (SECURE) Act of 2019, P.L. 116-94. The definition of a disaster area in Sec. 7508A(d)(3) would be amended to mean “an area in which a major disaster for which the President provides financial assistance under section 408 of the Robert T. Stafford Disaster Relief and Emergency Assistance Act (42 U.S.C. 5174) occurs.” Currently, that paragraph cross-refers to the definition in Sec. 165(i)(5)(B).

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Other tax provisions

The bill includes other tax provisions, including extension of various highway-related taxes, and extension and modification of certain superfund excise taxes. It also would allow private activity bonds for qualified broadband projects and carbon dioxide capture facilities. 

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