These rules were set to go into effect for the 2023 tax filing year, in accordance with the Infrastructure Investment and Jobs Act passed in November 2021. The act requires the Internal Revenue Service (IRS) to define what a "cryptocurrency broker" is and for such businesses to issue a Form 1099-B to each customer detailing their profits and losses from trades, as well as provide this same information to the IRS.
However, more than a year has passed since the infrastructure bill became law, and the IRS has yet to publish a definition of a "crypto broker" or create standard forms for these firms to use in making their reports. In a statement on December 23, the Treasury Department said that it intends to develop such rules soon, stating: "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 ... Final regulations will be published after careful consideration of all public comments received and all testimony at the public hearing."
In the meantime, the department has stated that brokers will not be required to comply with the new crypto tax provisions. However, taxpayers (customers) will still be required to do so.
The crypto tax provisions have faced controversy within the blockchain industry since they were first proposed. Critics have argued that the broad definition of "broker" under the law could be used to target Bitcoin miners, who may struggle to comply with the reporting requirements.
Controversial Crypto Tax Provisions Delayed by U.S. Treasury Department
The United States Treasury Department has announced that it will delay the implementation of controversial crypto tax reporting rules until further notice. These rules were set to go into effect for the 2023 tax filing year, in accordance with the Infrastructure Investment and Jobs Act passed in November 2021. The act requires the Internal Revenue Service (IRS) to define what a "cryptocurrency broker" is and for such businesses to issue a Form 1099-B to each customer detailing their profits and losses from trades, as well as provide this same information to the IRS.
However, more than a year has passed since the infrastructure bill became law, and the IRS has yet to publish a definition of a "crypto broker" or create standard forms for these firms to use in making their reports. In a statement on December 23, the Treasury Department said that it intends to develop such rules soon, stating: "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 ... Final regulations will be published after careful consideration of all public comments received and all testimony at the public hearing."
In the meantime, the department has stated that brokers will not be required to comply with the new crypto tax provisions. However, taxpayers (customers) will still be required to do so.
The crypto tax provisions have faced controversy within the blockchain industry since they were first proposed. Critics have argued that the broad definition of "broker" under the law could be used to target Bitcoin miners, who may struggle to comply with the reporting requirements.
