IRS Confirms Non-Enforcement of Crypto Reporting Law
After weeks of confusion and concern in the crypto community, the IRS has clarified that the new law requiring immediate reporting of crypto transactions over $10,000 is not currently being enforced and won’t be for some time. The IRS and Treasury Department stated that businesses do not have to report digital asset receipts in the same way as cash until regulations are issued. This confirms what experts have been saying: the law will not be enforced until a period of public comment and review takes place. However, questions still remain about who exactly is implicated by the law.
Who Does the Law Implicate?
The fine print of the measure states that any American who receives over $10,000 worth of crypto in the course of “trade or business” must report identifying information about the payer. However, there are challenges in treating crypto like cash. For example, individuals receiving payments from DAOs may not be able to identify individual payers. Crypto stakers may also struggle with listing Ethereum’s social security number due to its decentralized nature.
Legal Challenge to the Law
Crypto advocacy group Coin Center has filed a lawsuit against the Treasury Department and IRS, arguing that the new statute is unconstitutional. The case is currently on appeal.
Hot Take: Uncertainty Remains Despite Non-Enforcement Announcement
The recent announcement by the IRS provides some relief for crypto enthusiasts concerned about immediate enforcement of the reporting law. However, uncertainties surrounding who exactly is affected by the law and how certain types of crypto transactions should be treated persist. The ongoing legal challenge against the law further adds to the ambiguity surrounding its implementation. As regulations are yet to be issued, it remains crucial for individuals and businesses involved in crypto to stay informed and seek legal advice to ensure compliance with future requirements.
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