Wednesday 1 February 2023
Home / none / U.S. delays crypto tax reporting rules, as it still can’t define what a ‘broker’ is

U.S. delays crypto tax reporting rules, as it still can’t define what a ‘broker’ is

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:

“The Department of the Treasury (Treasury Department) and the IRS intend to implement section 80603 of the Infrastructure Act by publishing regulations specifically addressing the application of sections 6045 and 6045A to digital assets and providing forms and instructions for broker reporting […] After careful consideration of all public comments received and all testimony at the public hearing, final regulations will be published.”

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:

“Brokers will not be required to report or furnish additional information with respect to dispositions of digital assets under section 6045, or issue additional statements under section 6045A, or file any returns with the IRS on transfers of digital assets under section 6045A(d) until those new final regulations under sections 6045 and 6045A are issued.”

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.

Original Article

About Jude Savage

Check Also

Solana price rally risks exhaustion after SOL’s 120% pump in two weeks

Solana (SOL) price is up an impressive 60% since the new year, partially boosted by hype surrounding meme cryptocurrency Bonk (BONK). However, the SOL/USD pair now shows signs of exhaustion, raising anticipations that the token may see a short-term correction in the coming days. Solana turns overboughtSolana is one of the best performing cryptocurrencies so far in 2023 after being one of the biggest losers in 2022. On Jan. 9, SOL's price jumped to as high as $19.50, or around 120% gains in a recovery rally after sliding below $8 on Dec. 29, 2022. But the price spik also turned Solana into an overbought asset, per its daily relative strength index (RSI) reading above 70, as shown below. SOL/USD daily price chart. Source: TradingViewTraditional investors typically see an overbought RSI as a potential sell signal, given the indicator has historically coincided with a period of buyer exhaustion. As a result, SOL's price could enter a correction or a sideways consolidation stag..

Leave a Reply

Your email address will not be published. Required fields are marked *