2024 IRS Tax Reporting Rule on Crypto Transactions Above $10K Sparks Controversy
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2024 IRS Tax Reporting Rule on Crypto Transactions Above $10K Sparks Controversy

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5 months ago

The Internal Revenue Service (IRS) now requires anyone who receives at least $10,000 in cryptocurrencies to report transaction information to the IRS.

2024 IRS Tax Reporting Rule on Crypto Transactions Above $10K Sparks Controversy

The Internal Revenue Service (IRS) now requires anyone who receives at least $10,000 in cryptocurrencies to report transaction information to the IRS. This includes the name, address, and Social Security number (SSN) of the sender, as well as the amount, date, and nature of the transaction.

This is part of the new tax reporting obligations that took effect on January 1, 2024, after the infrastructure bill signed into law by United States President Joe Biden in November 2021.

Those who fail to file a report within 15 days of a transaction could be charged with a felony offense. The rule is self-executing, meaning it is immediately operational and enforceable without further action.

However, crypto advocacy group CoinCenter has challenged the new rule, arguing that “the problem is many will find it difficult to comply with what is supposedly a straightforward (if unconstitutional) new obligation.”
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CoinCenter notes that blockchain miners and validators who receive block rewards above $10,000 do not have any identifiable sender to include in a report. Similarly, those who swap crypto-for-crypto through decentralized exchanges do not have any identifiable sender to report.

The group also objects to the lack of clarity around determining the value of any particular cryptocurrency. Furthermore, CoinCenter raised the issue of receiving donations from anonymous donors, and the difficulty in reporting the sender’s information.

In June 2022, CoinCenter filed a lawsuit against the U.S. Treasury challenging the rules as unconstitutional. The case is still in court.
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