US Treasury and IRS Announce Business Reporting Exemption for Digital Assets
The US Treasury Department and Internal Revenue Service (IRS) have announced that businesses are not required to report the receipt of digital assets in the same manner as cash until specific regulations are issued. This decision comes in response to the Infrastructure Investment and Jobs Act, which classified digital assets as cash and mandated reporting for taxpayers receiving digital assets exceeding $10,000.
Clarification on Reporting Rules
The original rule required centralized exchanges to submit client information to the IRS, while individuals using peer-to-peer or non-custodial solutions would be responsible for submitting information. However, the new announcement clarifies that the provision requiring reporting regulations must be issued before it goes into effect.
Continued Reporting for Cash Transactions
The announcement emphasizes that the exemption does not impact reporting rules for cash transactions conducted in the course of business. Cash receipts over $10,000 must still be reported on Form 8300 within 15 days of receipt.
Proposed Regulations and Public Input
To provide clarity and procedures for reporting digital asset receipts and crypto tax on assets over $10,000, the Treasury and IRS plan to issue proposed regulations. The public will have the opportunity to provide written comments and participate in a public hearing.
Positive Reactions from Crypto Community
The crypto community has responded positively to the news of halted enforcement. The Blockchain Association called it a “positive step forward,” while Miles Jennings of a16z Crypto cautioned against following unreliable guidance.
Hot Take: IRS Halts Enforcement of $10K Crypto Tax Reporting Rule Pending Further Regulation
The US Treasury and IRS have announced that businesses are exempt from reporting digital asset receipts until specific regulations are issued. This decision comes in response to the Infrastructure Investment and Jobs Act, which mandated reporting for taxpayers receiving digital assets exceeding $10,000. The clarification states that the reporting provision must be accompanied by regulations before going into effect. However, reporting requirements for cash transactions remain unchanged. The Treasury and IRS plan to issue proposed regulations and invite public input. The crypto community has welcomed the news, with positive reactions emphasizing the need for clarity and caution against unreliable guidance.
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