New Rule Requires Crypto Transactions Over $10,000 to Be Reported to the IRS
The crackdown on crypto continues. As part of President Joe Biden’s 2021 Infrastructure Investment and Jobs ACT, the Internal Revenue Service (IRS) will start requiring that all cryptocurrency transactions over $10,000 be reported.
New tax reporting requirements demand businesses receiving over $10,000 in cryptocurrencies to promptly disclose transaction details, including the sender’s name, address, and Social Security number (SSN), alongside transaction amount, date, and nature.
The specific mandate, called rule 6050I, was originally added as a way to reduce the possibility of crypto being used in money laundering, tax evasion, and funding terrorism.
Enacted on January 1, 2024, under the infrastructure bill signed by Biden in November 2021, this rule mandates a 15-day reporting window post-transaction, with non-compliance potentially resulting in felony charges. The self-executing nature of the rule ensures immediate enforceability.
However, crypto advocacy group CoinCenter contests the regulation, citing difficulties in compliance and labeling the obligation as unconstitutional. They point out challenges faced by blockchain miners, validators, and users engaging in decentralized exchanges where identifiable senders may be absent.
CoinCenter also criticizes the ambiguity in determining cryptocurrency values and raises concerns about reporting when receiving anonymous donations. Having filed a lawsuit against the US Treasury in June 2022, CoinCenter’s legal challenge to the constitutionality of these rules remains unresolved in the courts.
“Unfortunately for the time being there is an obligation to comply – but it’s unclear how one can comply,” CoinCenter executive director Jerry Brito added. He also posted an explanation of who will be affected by the new rule.
Information for this story was found via Yahoo, Coindesk, Jerry Brito on X, and the sources and companies mentioned. The author has no securities or affiliations related to the organizations discussed. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.
