Cryptocurrency Tax Bill Postponed in U.S.
2022.12.23 23:13
Cryptocurrency Tax Bill Postponed in U.S.
Budrigannews.com – As a result of a decision made by the Treasury Department of the United States, a crucial set of crypto tax reporting rules will be delayed until further notice. In accordance with the Infrastructure Investment and Jobs Act, which was passed in November 2021, the regulations were intended to take effect during the tax filing year of 2023.
A standard definition of what constitutes a “cryptocurrency broker” must be developed by the Internal Revenue Service (IRS) in accordance with the new law. Any company that meets this requirement is obligated to provide each customer with a Form 1099-B outlining their trade profits and losses. It additionally requires these organizations to give this equivalent data to the IRS so it will know about clients’ earnings from exchanging.
However, despite the fact that the infrastructure bill was passed into law more than a year ago, the IRS has not yet published a definition of what a “crypto broker” is or developed standard forms that these businesses can use to prepare reports.
The Treasury Department stated in a statement on December 23 that it intends to develop such regulations soon, citing the following:
“The Department of the Treasury (Treasury Department) and the IRS intend to implement section 80603 of the Infrastructure Act by publishing regulations specifically addressing the application of sections 6045 and 6045A to digital assets and providing forms and instructions for broker reporting […] After careful consideration of all public comments received and all testimony at the public hearing, final regulations will be published.”
Brokers will not be required to comply with the new crypto tax provisions, according to the department:
“Brokers will not be required to report or furnish additional information with respect to dispositions of digital assets under section 6045, or issue additional statements under section 6045A, or file any returns with the IRS on transfers of digital assets under section 6045A(d) until those new final regulations under sections 6045 and 6045A are issued.”
However, the crypto tax provisions will still need to be followed by taxpayers (customers).
Since they were first proposed, the crypto tax provisions have been contentious within the blockchain industry. It has been argued by critics that the law’s expansive definition of “broker” could be used to target Bitcoin miners, who will likely be unable to comply with reporting requirements.
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