In the United States, new regulations are needed to expand the transaction reporting rules on digital assets.
On January 16, the Internal Revenue Service (IRS) and the Treasury Department in the U.S. declared that the controversial $10,000 transaction reporting rules are currently not applied to cryptocurrencies.
These agencies stated,
“Businesses are not obliged to report digital asset acquisitions just as they are required to report cash purchases, for now. This will be valid until the Treasury and IRS issue new regulations.”
In further explanation by the IRS and the Treasury,
“This announcement provides temporary guidance and does not impose an obligation at this time on whether digital assets meet the cash reporting threshold in a single transaction or related transactions.”
They indicated that in the future, they will publish proposed regulations regarding digital asset acquisitions, during which they will accept written comments from the public and optionally hold public hearings.
History of the Reporting Rule
This rule requires businesses to report cash purchases over $10,000 within 15 days on Form 8300. The current text covers only cash transactions and does not explicitly include digital assets. However, a law named the “Infrastructure Investment and Jobs Act” anticipated treating digital assets as cash.
The IRS and Treasury acknowledged this change but emphasized that new guidance is needed for implementation.
The industry group CoinCenter claimed that these rules, especially at the beginning of January, started to be applied to crypto transactions and expressed concerns that the rules could apply to institutions like blockchain miners, validators, and users of decentralized exchanges, which may not be able to comply.
CoinCenter also filed a lawsuit against these rules, but this lawsuit has not made progress since mid-2023 and was not mentioned in the latest announcements. Therefore, it seems that the lawsuit did not trigger the latest announcements.
These postponed rules cover additional reporting requirements for large transactions. However, crypto investors and traders in the U.S. are still required to report gains and losses from their digital assets in accordance with general income tax rules.
