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The Editors

Congress’s Crypto Tax Proposal Makes Perfect Sense

Ignore the industry doomsayers. New reporting requirements for digital assets are a good first step toward getting people to pay what they owe.

He’d like to know more about your crypto gains.

He’d like to know more about your crypto gains.

Photographer: Nicholas Kamm/AFP/Getty Images

The infrastructure plan wending its way through the U.S. Congress leaves a lot to be desired. But one of its most bitterly opposed provisions shouldn’t be controversial: a measure aimed at stamping out tax evasion in the burgeoning world of cryptocurrencies.

For most investors in most kinds of financial assets, calculating tax is relatively straightforward. Taxable gains are summarized in a 1099 form that brokers give their clients every year. The Internal Revenue Service also gets a copy so it can verify tax returns.