According to a report from Cointelegraph, U.S. businesses are currently exempt from reporting cryptocurrency transactions exceeding $10,000 to the Internal Revenue Service (IRS), pending the release of a regulatory framework by the agency.
This decision comes after the U.S. Treasury Department and the IRS revised the Infrastructure Investment and Jobs Act (IIJ Act), as announced by the IRS on January 16.
The law requiring all U.S. businesses to report cryptocurrency transactions over $10,000 went into effect on January 1, but the IRS has decided to postpone enforcing this rule.
“At this time, digital assets are not required to be included when determining whether cash received in a single transaction (or two or more related transactions) meets the reporting threshold.”
Crypto users have reacted negatively to the new regulations. Jerry Brito, the executive director of Coin Center, commented that many users would find it challenging to comply with the reporting requirements without more detailed guidance from the IRS.
He speculated that filers would attempt to comply with the law, but they could potentially be charged with a felony if they inadvertently deviate from the regulations.
The IIJ Act mandates taxpayers to report receiving more than $10,000 in cash within 15 days of the transaction. Digital assets were classified as cash under Section 6050I of the Act, but this won't affect U.S. cryptocurrency users for now.
The IRS and the Treasury have stated their intention to issue proposed regulations regarding digital asset reporting, but they have not specified when these regulations will be introduced.
The public will also have an opportunity to comment on the proposed regulations and provide input on their structure.
Advocates for digital assets, including the Blockchain Association, view this move as a "positive step forward." They believe it will help address the challenges associated with reporting cryptocurrency transactions.
The U.S. House Financial Services Committee also supported the “stopgap action” but pointed out multiple underlying problems with the “poorly constructed digital asset reporting requirements” that were passed on January 1st.
Comments