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United States businesses have been granted a temporary exemption from the obligation to report cryptocurrency transactions exceeding $10,000 to the Internal Revenue Service (IRS). This decision follows the enactment of a law on January 1, 2024, which initially mandated the reporting of such transactions.
Jerry Brito, the executive director of Coin Center, a digital currency policy advocacy group, had previously expressed concerns about the practicality of enforcing crypto reporting requirements in the absence of clear guidance from the IRS. He specifically questioned the reporting obligations for various crypto participants, including miners, validators, and those engaged in on-chain decentralized exchanges.
New crypto tax reporting obligations took effect on Jan 1.
If you receive $10k or more in crypto you now have an obligation to report the transaction (including names, addresses, SS numbers, etc.) to the IRS within 15 days under threat of a felony charge. pic.twitter.com/wyRsfJEpMo
— Jerry Brito (@jerrybrito) January 2, 2024
Changes To Rules For Cryptocurrency Transactions
However, in a recent press statement, the Treasury Department and the IRS have clarified that businesses are not required to report the receipt of digital assets in the same manner as cash until a comprehensive regulatory framework is established.
This development comes in response to the Infrastructure Investment and Jobs Act, which amended rules requiring businesses engaged in a trade or business to report cash receipts exceeding $10,000, considering digital assets as equivalent to cash.
According to the announcement (2024-4), transitional guidance will be provided as the Treasury Department and the IRS work towards implementing the new provisions outlined in the Infrastructure Investment and Jobs Act. Notably, the specified provision necessitates the issuance of regulations before it becomes effective.
Importantly, this announcement does not impact the rules applicable before the enactment of the Infrastructure Investment and Jobs Act concerning cash received in the course of a trade or business. Such transactions must still be reported on Form 8300, titled “Report of Cash Payments over $10,000 Received in a Trade or Business,” within 15 days of receiving the cash.
Looking ahead, the Treasury Department and the IRS have committed to proposing regulations that will offer additional information and procedures for reporting the receipt of digital assets. This will also provide an opportunity for the public to submit written comments and, if requested, participate in a public hearing.
This temporary reprieve offers a sigh of relief as businesses navigate the evolving landscape of crypto regulations, allowing stakeholders time to adapt to the forthcoming reporting requirements in a more organized and informed manner. The industry now awaits the proposed regulations that will shape the future of crypto reporting obligations for U.S. businesses.
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