The Internal Revenue System (IRS) and the US Treasury Department have decided to postpone the crypto reporting requirements temporarily to ease the burden on businesses.
IRS Pauses New Crypto Rule
Businesses conducting crypto transactions in the US have a temporary relief as the IRS and the US Treasury Department have decided to pause the crypto reporting requirements.
In 2021, the Biden administration introduced the new crypto reporting regulations in its Infrastructure Investment and Jobs Act to monitor the industry, mandating that businesses must disclose all digital asset transactions exceeding $10,000.
Effective from January 1, 2024, the Act instructs businesses to treat digital asset transactions on par with cash, necessitating the inclusion of all transactions (both cash and crypto) exceeding $10,000 in their tax filings. However, now that the IRS and the Treasury have relaxed the rules temporarily, businesses can continue with the existing reporting method.
IRS Working On New Reporting Regulations
Under the IRS’s latest instructions, businesses need to report only cash receipts over $10,000 using Form 8300 within 15 days of the transaction. Both agencies have announced that they need not include digital asset transactions in their Form 8300 reports till further instructions are issued.
The IRS released a statement saying,
“Treasury and the IRS intend to issue proposed regulations to provide additional information and procedures for reporting the receipt of digital assets, giving the public an opportunity to comment both in writing and, if requested, at a public hearing.”
The tax authority also added that the postponement would not change the income tax obligations of individuals involved in businesses or trades receiving digital assets or those individuals who use digital assets to make payments.
Pushback For New Crypto Act
The decision to postpone the implementation of the rule is a result of the lawsuit levied against the IRS by the crypto lobbying group CoinCenter, which fears a state of mass surveillance being imposed on American citizens by the new Act.
There has also been pushback due to the nature of the infrastructure bill and how it puts ordinary crypto brokers under the microscope. Under the bill, crypto exchanges and custodians will also be required to report qualifying transactions to the IRS. Furthermore, the crypto community, in general, feels that this level of reporting will defeat the nature of digital assets as it will require providing the sender’s personal information, thus rendering the private nature of crypto transactions useless.
Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.
