IRS and US Treasury Waive Reporting of Crypto Transactions Exceeding $10,000
In Brief
The IRS and the US Treasury Department have relieved businesses from reporting digital asset payments exceeding $10,000.
The Internal Revenue Service (IRS) and the United States Department of the Treasury have jointly stated that businesses are not required to report digital asset payments exceeding $10,000 until both agencies introduce proposed regulations, during which they aim to encourage public input by providing an opportunity for comments.
This clarification follows the agencies’ prior announcement, confirming that businesses are exempt from reporting digital assets in the same way as cash transactions.
The Infrastructure Investment and Jobs Act, implemented on January 1, mandated businesses to report cryptocurrency transactions exceeding $10,000, treating them on par with cash transactions. This legal provision sought to align reporting standards for digital assets with those traditionally applied to cash transactions.
The announcement retains the rules applicable prior to the enactment of the Infrastructure Investment and Jobs Act regarding cash received in the course of a trade or business. According to these rules, such cash transactions, exceeding $10,000, must be reported on Form 8300, titled “Report of Cash Payments over $10,000 Received in a Trade or Business,” within a 15-day timeframe from the date of receiving the cash.
“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 IRS said in a statement.
The provision has become the subject of a lawsuit initiated in 2022 against the IRS and the Treasury Department by the cryptocurrency lobbying group Coin Center, challenging the constitutionality of a cryptocurrency tax-reporting requirement embedded in an infrastructure law.
In their argument, Coin Center contends that the rule, if implemented, would establish a mass surveillance regime affecting ordinary Americans.
This legal contention centers around the obligation to report personal data for individuals and businesses involved in cryptocurrency transactions exceeding $10,000. If enforced, this reporting requirement would provide the government with an unprecedented level of transactional detail within a space where users have historically taken measures to safeguard their privacy.
Coin Center Navigates Regulatory Environment
Coin Center operates as a non-profit research and advocacy group focused on analyzing public policy issues associated with cryptocurrency and blockchain. Their mission involves a comprehensive examination of the regulatory landscape and policy considerations surrounding these emerging technologies.
Recently, Coin Center made public its decision not to respond to a strongly worded written request from the US Senator Elizabeth Warren. The letter, written last month, was addressed to cryptocurrency exchange Coinbase and several industry groups, including Coin Center. Senator sought information on the number of former defense and law enforcement officials employed by Coin Center.
The inquiry was framed in the context of concerns that the advocacy group might be working against Congressional efforts to address the alleged role of cryptocurrencies in financing terrorist groups, including Hamas.
The recent decision by the IRS and the US Department of the Treasury reflects a nuanced and evolving landscape in cryptocurrency regulations and the interests of American citizens.
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Alisa is a reporter for the Metaverse Post. She focuses on investments, AI, metaverse, and everything related to Web3. Alisa has a degree in Business of Art and expertise in Art & Tech. She has developed her passion for journalism through writing for VCs, notable crypto projects, and scientific writing. You can contact her at alisa@mpost.io
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Alisa is a reporter for the Metaverse Post. She focuses on investments, AI, metaverse, and everything related to Web3. Alisa has a degree in Business of Art and expertise in Art & Tech. She has developed her passion for journalism through writing for VCs, notable crypto projects, and scientific writing. You can contact her at alisa@mpost.io
