Security

Wings

Coin

Gains

<p>The controversial tax law that requires U.S. citizens to report crypto transactions of $10,000 or more has taken effect, giving the IRS a major new source of data on crypto users. The law, included in the <a class="editor-rtfLink" href="https://www.congress.gov/bill/117th-congress/house-bill/3684/all-actions?overview=closed#tabs" target="_blank" rel="noopener nofollow">Infrastructure Investment and Jobs Act</a>, is now in effect as of January 1, 2024.</p> 
<h2 id="the-irs-is-on-the-wings-waiting">The IRS Is On The Wings Waiting&nbsp;</h2> 
<p>According to Jerry Brito, the Executive Director of Coin Center, the law&nbsp;<a class="editor-rtfLink" href="https://twitter.com/jerrybrito/status/1742246481661235627" target="_blank" rel="noopener nofollow">requires</a>&nbsp;anyone who receives $10,000 or more in crypto during their trade or business to report to the IRS about that transaction. As part of this reporting, details must include, among other things, the name, address, and Social Security number of the person from whom the funds were received, the amount received, and the date and nature of the transaction.&nbsp;</p> 
<p>What’s worse, Brito warns, is that any user who doesn’t file within 15 days of receiving the transaction could be found guilty of a felony. From a revenue perspective, the law is a major expansion of the IRS’ ability to track crypto transactions. The <a href="https://bitcoinist.com/irs-ftx-24-billion-tax-bill-crypto/" target="_blank" rel="noopener ">IRS</a> has long been concerned about people and businesses using cryptocurrency for tax evasion. </p> 
<p>As such, the enforcement of this law gives the tax collecting agency a powerful new tool to address the problem possibly. However, this implementation could present obstacles to crypto adoption and innovation. </p> 
<p>Since the threshold has been placed at $10,000, many people and entities will likely be reluctant to use popular coins, including Bitcoin, USDT, or Ethereum, if they know they must report every transaction to the IRS. As such, this could slow the adoption and even innovation in crypto.</p> <a href="https://www.tradingview.com/x/jujxGPQ3/" rel="nofollow noopener" target="_blank"><img loading="lazy" decoding="async" class="size-full" src="https://www.tradingview.com/x/jujxGPQ3/" alt="Bitcoin price trending upward on the daily chart | Source: BTCUSDT on Binance, TradingView" width="1233" height="592"></a> 
<h2 id="coin-center-filed-law-suit-blames-irs-for-providing-guidance">Coin Center Filed Law Suit, Blames IRS For Providing Guidance</h2> 
<p>Before this implementation, Coin Center, a crypto advocacy group,&nbsp;<a class="editor-rtfLink" href="https://www.coincenter.org/coin-center-has-filed-a-court-challenge-against-the-treasury-dept-over-unconstitutional-financial-surveillance/" target="_blank" rel="noopener nofollow">filed</a>&nbsp;a lawsuit challenging its constitutionality. Specifically, Coin Center argues that the new law is ambiguous and makes it challenging for crypto users and businesses to comply.&nbsp;</p> 
<p>Citing how expansive crypto is and the number of different players involved, ranging from simple transactors to miners and validators, Coin Center, in their lawsuit, says the law doesn’t provide clarity. Meanwhile, the IRS, on its path, has failed to provide guidance.</p> 
<p>The lawsuit is still pending, but whether it will be successful remains to be seen. In the U.S., crypto assets are considered properties, meaning capital gains or losses must be reported for tax purposes. The rate applied to these capital gains or losses varies depending on how long it is held.</p>

IRS Free To Collect Crypto Gains After This Controversial Tax Law Takes Effect

Table of Contents

Bitcoinist

Other articles published on Jan 4, 2024

Baby Grok: A New Era in DeFi Powered by AI

Analyzing Ripple (XRP)’s Price Potential; Hedera (HBAR) & Rebel Satoshi (RBLZ) Seek Bullish Trends

Ex-Citigroup execs to launch alternative Bitcoin security amid ETF uncertainty

Instant: A Fee-Free Solana USDC Debit Card Available Worldwide

Major Partners to Join the Upcoming Aleph Zero CTRL+Hack+ZK Hackathon

Financial Services Chair Retires; Here’s What it Means for Crypto

Join our free newsletter for daily crypto updates!