The US Treasury Department and the IRS have postponed the enforcement of the requirement for brokers to report profits earned by crypto investors. The new tax law, including the $1 trillion property tax passed by the US Congress in 2021, will be implemented in 2023.
Crypto traders will follow the existing rules until the final rules are issued
The U.S. Department of the Treasury and the Internal Revenue Service (IRS) are delaying requirements for digital asset sellers to begin tracking and reporting customer revenue. The installation was introduced in accordance with the law on investment in infrastructure, which was issued at the end of 2021 and entered into force on January 1. 1, 2023.
The main purpose of this requirement, to impose on crypto companies the regulations that currently apply to securities traders, is to increase the tax revenue from trading coins by reporting the income from such trading on a 1099 form. . However, more rules are needed to implement the law, including defining the definition of the word “broker” – critics have said that it is currently too broad and covers companies such as children who may not be able to to obey the law.
On Friday, the Treasury and the IRS issued revised guidance on the matter. The statement said that crypto brokers should not release additional information about digital asset transfers until the final rule is passed and noted: “Vendors are required to comply with applicable laws and regulations.”
Authorities pointed out that this directive only applies to returns filed by traders, while taxpayers must still report any income from transactions related to cryptocurrencies. “They are also required to answer the digital value questions on page 1 of Form 1040PDF or Form 1040-SRPDF,” the announcement explains.
In another post published in December. In Jan. 23, the IRS also said it is delaying a new rule requiring third-party processing companies, such as Paypal, Venmo, Cash App and other digital wallets, to report transactions over $600 until the next fiscal year.
The new minimum threshold was lowered with the 2021 American bailout plan, down by more than 200 transactions from the previous one. It was first applied to transactions that took place during the 2022 calendar year, which is now considered the “transition period”.
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