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Infrastructure Plan | IRS: Temporary Suspension of Crypto Regulations Requiring Reporting of Transactions Over $10,000 by Businesses

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Infrastructure Plan | IRS: Temporary Suspension of Crypto Regulations Requiring Reporting of Transactions Over $10,000 by Businesses

With the enactment of the "Infrastructure Investment and Jobs Act IIJA", the controversial "1 million dollar cryptocurrency tax law" has once again come to the forefront. Under public pressure, the Internal Revenue Service (IRS) announced that until new regulations are in place, businesses do not have to adhere to cash norms and are not required to disclose details of cryptocurrency transactions and personal information.

IRS: Businesses Currently Do Not Need to Report Details of Digital Asset Transactions

One of the provisions of the "Infrastructure Bill" that came into effect on January 1 this year required individuals conducting cryptocurrency transactions or businesses worth over $10,000 to report detailed personal information to the IRS, or face criminal prosecution. This regulation has sparked dissatisfaction and criticism from many cryptocurrency companies and communities, who claim it is nearly impossible to comply with.

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However, according to a statement issued by the IRS on Tuesday, the requirement for businesses to report cryptocurrency transactions over $10,000 as stipulated in the Infrastructure Bill has been temporarily suspended:

The Treasury Department and the IRS plan to propose related regulations shortly, providing additional information and procedures for reporting digital assets. The public will have the opportunity to submit written comments on this, and public hearings may also be held if necessary.

The statement also added that "Notice 2024-4 will serve as transitional guidance to assist the Treasury Department and the IRS in providing new regulations in the future, and businesses do not need to report digital assets like cash until new reporting forms and information notices are issued."

Coin Center: Pleased that IRS Listened to Industry Voices

In response to this move by U.S. government agencies, industry professionals have generally expressed approval, believing that the Treasury Department and the IRS have indeed listened to the industry and community feedback.

Coin Center, a cryptocurrency advocacy organization currently in litigation with the U.S. Treasury Department, had its Executive Director Jerry Brito express support while still maintaining some reservations:

It's great to see the IRS finally understand the difficulty of making cryptocurrency comply with 6050I. However, the IRS official announcement claims that new laws will be established for reporting, but this assertion was not mentioned in the press release, only emphasizing that digital assets do not need to be included in 6050I reporting. Is there a discrepancy in the content?

Just two weeks ago, he had strongly protested against the bill through a press release, stating that it would implement a "mass surveillance system" on the American people.

Infrastructure Bill 60501 Tax Law Enacted, Coin Center on Cryptocurrency Policy: Regulations Unclear, Users Difficult to Comply

Some users have mocked the situation, suggesting that instead of government-drafted guidelines, an actual and neutral law should be established for compliance:

Can we get a "real" regulation rather than bureaucratic "institutional guidance"?

However, whether a cryptocurrency-specific tax law emerges or not, the Treasury Department had previously confirmed that 6050I did not actively include industries like miners, wallet providers, and DeFi engineers in the definition of brokers. Therefore, individuals or businesses mentioned above may no longer need to worry about the KYC pressures stemming from this tax law.

With this development, the cryptocurrency community can perhaps breathe a sigh of relief temporarily and look forward to clearer or more detailed regulations in the future.