The IRS is rolling back crypto tax laws by exempting TXs over $10K
U.S. businesses will no longer be required to report cryptocurrency transactions over $10,000 to the Internal Revenue Service (IRS) until the tax agency issues a regulatory framework.
The decision follows an amendment to the Infrastructure Investment and Jobs Act (IIJ Act) by the US Treasury and the IRS that was released by the IRS on January 16.
On January 1, a law requiring all US businesses to report cryptocurrency transactions of more than $10,000 went into effect, but the tax regulator has held back on enforcing the rule for the time being.
“Currently, digital assets are not required to be included when determining whether cash received in a single transaction (or two or more related transactions) meets the reporting threshold.”
The new rules have not been well received by crypto users, with Jerry Brito, executive director of CoinCenter, saying that many will “find it difficult to comply” with the reporting requirements without further guidance from the IRS.
He assumed that filers would try to comply with the law, but could be found guilty of a crime.
The IIJ Act requires taxpayers to report receipts of more than $10,000 within 15 days of the transaction. Digital assets used to be considered cash under Section 6050I of the Act, but for now it doesn't affect US crypto users:
The IRS said it and the Treasury plan to issue proposed rules regarding digital asset reporting, but did not say when they would be introduced.
It also allows the public to comment on how the rules should be drafted.
RELATED: Tax Obligation: Is crypto ‘impossible' to report under US law?
Digital asset advocates, the Blockchain Association, hailed the news as a “positive step” given the difficulty of reporting cryptocurrency transactions.
IRS 6050I – Problematic Infrastructure Bill Provision Reporting Digital Asset Transactions Over $10K – Not Effective Until Additional Legislation. Affirmative action required given the scope of the impossibility and reporting.https://t.co/x8SFAQfuEh
— Blockchain Association (@BlockchainAssn) January 16, 2024
The US House Financial Services Committee supports “stop action” but emphasized that there are still several fundamental problems with the “poorly constructed digital asset reporting requirements” passed on January 1.
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