U.S. Postpones Rule on Reporting $10,000+ Cryptocurrency Transactions
Summary:
The enforcement of a new U.S. regulation requiring businesses to report cryptocurrency transactions over $10,000 to the IRS has been postponed. This decision was made following a revision of the Infrastructure Investment and Jobs Act by the Treasury and the IRS. Cryptocurrency users had previously expressed concerns over compliance difficulties. While the IRS and Treasury plan to issue regulations regarding digital asset reporting, no timeline has been provided. They intend to invite public input on this matter. Meanwhile, groups like the Blockchain Association have welcomed the interim measure.
Businesses in the United States are not required to report cryptocurrency transactions exceeding $10,000 to the Internal Revenue Service (IRS) until the tax agency issues a final regulation. The Treasury and the IRS revised the Infrastructure Investment and Jobs Act (IIJ Act) postponing its application, as disclosed in an IRS statement on January 16. The law, which went into effect on the first day of the year, mandates all US businesses to report cryptocurrency transactions over $10,000, but enforcement has been suspended for now. Currently, the inclusion of digital assets in determining whether a transaction meets the reporting threshold is not necessary.
Cryptocurrency users were not pleased with the new guidelines, and concerns over compliance difficulties were raised by Coin Center's Executive Director, Jerry Brito. He suggested that individuals might try to meet the law's requirements but risk felony charges. The IIJ Act stipulates that taxpayers must report any cash received over $10,000 within 15 days of the transaction. Although digital assets were categorized as cash under Section 6050I of the Act, this will not affect cryptocurrency users in the United States in the immediate term.
The IRS and Treasury are planning to publish proposed regulations about digital asset reporting but did not specify a timeline for this step. They also plan to invite public input on how these regulations should be structured. The Blockchain Association, a group advocating for digital assets, welcomed this decision, labeling it a "constructive progression," given the complexities of reporting cryptocurrency transactions.
Conversely, the U.S. House Committee voiced support for this temporary measure, but highlighted lingering issues related to the "defective digital asset reporting requirements" initiated on January 1.
Published At
1/17/2024 3:24:10 AM
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