Cryptocurrency group CoinCenter said on January 2 that new tax reporting obligations for cryptocurrencies went into effect on New Year's Day.
According to CoinCenter, these new rules require anyone receiving at least $10,000 in cryptocurrency to report transaction information to the IRS. Required data includes the name, address, and Social Security Number (SSN) of the sender, as well as the amount, date, and nature of the transaction.
Those who fail to file a report within 15 days of a transaction could be charged with a criminal offence, the advocacy group added.
Coin Center noted that the new rule took effect on January 1 and is self-executing, or enforceable immediately without any further action.
Guidance on the official IRS website states that the relevant rule applies to cash transactions of more than $10,000 in a business and commercial setting. It does not explicitly mention cryptocurrencies or digital assets within its definition of cash. However, the January 1 rule amends the Infrastructure Investment and Jobs Act, which took effect in 2021 and expanded the definition of cash to include digital assets.
CoinCenter has defied the rules
CoinCenter reiterated its opposition to the new rule today, calling the law “unconstitutional.” [and] It's also almost impossible to stick to.
She noted, for example, that blockchain miners and validators receiving newly issued rewards do not have any specific sender to include in a report to authorities. Likewise, I noticed that those who transact through decentralized exchanges do not have any specific sender to report. She also objected to the lack of clarity around determining the value of any particular cryptocurrency.
In addition, CoinCenter noted that relevant rules require individuals with reporting obligations to file Form 8300 with the IRS. However, CoinCenter said that Form 8300 was also sent to FinCEN and emphasized that this agency does not have the authority to request data about cryptocurrency transactions.
CoinCenter said it filed a lawsuit challenging the rules as unconstitutional against the US Treasury Department in June 2022. That case is still before court, it said.