The US Department of the Treasury and the Internal Revenue Service (IRS) recently announced revisions to their tax reporting rule for cryptocurrencies. It originally mandated extensive reporting of cryptocurrency transactions exceeding $10,000.
The Treasury Department is now informing businesses that they do not have to follow the same reporting requirements as cash for cryptocurrency transactions. However, this will only be the case until official crypto regulations are introduced in the country.
The US government declares that implementing regulations will come first
In a recent statement, the US Treasury Department clarified that digital asset transactions will not be subject to the same reporting requirements as cash, until regulations are introduced in the country.
“The Investing in Infrastructure and Jobs Act revised the rules requiring taxpayers engaged in a trade or business to report receiving cash in excess of $10,000 by counting digital assets as cash.”
Regulators aim to issue regulations that will provide additional details and procedures for reporting the receipt of digital assets. Additionally, the public will have the opportunity to provide feedback through written submissions and participate in a public hearing.
The reversal of this rule comes just two weeks after it was initially introduced publicly.
On January 2, BeInCrypto reported that US citizens who receive $10,000 or more in cryptocurrencies now have an obligation to report the transaction. The obligation includes reporting names and addresses, with a 15-day deadline.
Read more: How to Minimize Your Cryptocurrency Tax Liability: A Comprehensive Guide
The US government is tightening its grip on cryptocurrency taxpayers
The government, in cooperation with the IRS, is exploring effective ways to ensure that cryptocurrency holders in the United States accurately report their earnings and pay the appropriate amount of taxes.
Additionally, recent rule changes appear to be aimed at standardizing cryptocurrency reporting in a similar manner to traditional assets.
In August 2023, BeInCrypto reported that regulators had submitted proposed regulations that would require digital asset brokers to report certain sales and exchanges.
This aligns tax reporting on digital assets with securities and other financial instruments.
In recent years, the US government's stance on cryptocurrencies has sparked controversy. Many industry leaders assert that the government has adopted a regulation-by-implementation approach. This has led to legal action against major cryptocurrency exchanges such as Binance and Coinbase.
However, both exchanges argue that a lack of regulatory clarity makes it difficult. Especially to determine the optimal operational strategy for their business.
Read more: The Ultimate Guide to US Cryptocurrency Taxes for 2023
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