Crypto Community Voices Frustration Over New IRS Reporting Rules for Transactions Above $10,000
Summary:
Public frustration has emerged surrounding new regulations requiring US crypto users to report transactions exceeding $10,000 to the IRS. The law, which came into effect on January 1, has been criticized for its potentially unfeasible demands given the nature of on-chain transactions. Concerns have been expressed by notable figures within the crypto community, and sentiments have been aired online and through song. Critics argue that the law misunderstands “push only” transactions that can’t be rejected by recipients, potentially criminalizing ordinary crypto users. Other community members voice dissatisfaction over the lack of clear reporting guidelines.
Public frustration has emerged over recent legislation that necessitates cryptocurrency holders to declare transactions exceeding $10,000 to the Internal Revenue Service (IRS). The sentiments were expressed through various social media platforms as well as a song. This new regulation, applicable to American citizens, came into force on the first of January. It mandates that crypto brokers release user information to the IRS for any transaction surpassing $10,000, including the sender’s name, address and social security number. The rule also establishes a 15-day window to fulfill this declaration. Meeting this requirement might prove challenging given the nature of on-chain transactions, as stated by Coin Center executive director, Jerry Brito. Brito predicts difficulty in compliance from many users, who risk being charged with a felony.
It's not just Brito who holds concerns; other community members have also voiced their disappointments with the law. Adriano Feria blasted the law as “stupid”, even lampooning the creators as “idiotic” in a Twitter post. He argued the IRS should understand that transactions are "push only", meaning they can't be rejected by the recipient. Feria underscored the impossibility of "accepting" a crypto payment. Using U.S. Commissioner of Internal Revenue Daniel Werfel as an example, he said anyone could send over $10k in crypto to Werfel, making him an inadvertent felon.
The sentiment was shared by Ryan Adams, founder of Mythos Capital and Bankless, who bemoaned the lack of guidelines for reporting these transactions. However, some have interpreted the legislation as an attempt to dissuade people from selling their cryptocurrencies. Crypto singer Jonathan Mann categorized the law as "draconian", penning a song to express his thoughts. The song details how one of his nonfungible token (NFT) songs sold for 5.3 Ether (ETH), surpassing $10,000. He illustrated that apart from the buyer's ENS name, other required details like the actual name, address, and social security number aren't available, making compliance a near impossibility. As per his lyrics, accepting the money for a song could now be deemed as a criminal act given the recently enacted legislation.
Published At
1/4/2024 1:55:24 PM
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