Congress passed a law in November 2021 that required the new crypto rules to be issued.
A key set of crypto tax reporting rules is being delayed until further notice under a decision made by the United States Treasury Department. The rules were supposed to be effective in the 2023 tax filing year in accordance with the Infrastructure Investment and Jobs Act passed in November 2021.
The new law requires that the Internal Revenue Service (IRS) develop a standard definition of what a “cryptocurrency broker” is, and any business that falls under this definition is required to issue a Form 1099-B to every customer detailing their profits and losses from trades. It also requires these firms to provide this same information to the IRS so that it will be aware of customers’ incomes from trading.
However, more than 12 months have passed since the infrastructure bill became law, but the IRS has still not published a definition of what a “crypto broker” is or created standard forms for these firms to use in making the reports.
In a Dec. 23 statement, the Treasury Department says that it intends to craft such rules soon, as it explains:
Related: U.S. Senator Toomey introduces stablecoin regulation bill
In the meantime, the department says that brokers will not be required to comply with the new crypto tax provisions, stating:
However, taxpayers (customers) will still be required to comply with the crypto tax provisions.
The crypto tax provisions have been controversial within the blockchain industry ever since they were first proposed. Critics have argued that the broad definition of “broker” under the law could be used to attack Bitcoin miners, who will likely be unable to comply with reporting provisions.
Related Posts
