Breaking: IRS Postpones New Crypto Reporting Rules, Easing Immediate Burden
In a temporary relief to businesses dealing with crypto, the U.S. Treasury Department and the Internal Revenue Service (IRS) have announced a delay in the enforcement of new reporting requirements for digital asset transactions.
This postponement comes as the agencies work on implementing regulations following changes introduced by the Infrastructure Investment and Jobs Act.
Temporary pause to earlier guideline
The Act is part of the infrastructure bill signed by President Joe Biden in 2021. It redefined the treatment of digital assets, equating them with cash for reporting purposes. According to the revised rules, businesses engaged in trade or commerce must report any receipt of digital assets. That is, if the receipts exceed $10,000, similar to cash transaction reporting.
However, the recent announcement by the IRS indicates a transitional phase. The Treasury and IRS have clarified that businesses are not required to report digital asset transactions in the same manner as cash transactions until specific regulations are established.
Despite this temporary relaxation, the existing rules for reporting cash transactions remain unchanged. Businesses are required to report cash receipts over $10,000 using Form 8300 within 15 days following the transaction.
Arguments against IRS crypto reporting rules
The infrastructure bill also puts crypto brokers under scrutiny. These entities, including crypto exchanges and custodians, will be obliged to report qualifying transactions to the IRS once specific rules are formed.
However, a controversy erupted within the community as the rules also require providing information, including the sender’s personal details.
The IRS said in a statement on Tuesday, “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.”
Meanwhile, critics argue that these stringent measures could be impractical and potentially detrimental to the crypto industry’s growth and innovation.
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