In a news release on Jan. 16, the tax agency said that businesses “do not have to report the receipt of digital assets the same way as they must report the receipt of cash until Treasury and IRS issue regulations.”
“This announcement provides transitional guidance … and clarifies that at this time, digital assets are not required to be included when determining whether cash received in a single transaction (or two or more related transactions) meets the reporting threshold.”
Both the IRS and the Treasury said they will propose new regulations replying to reporting digital assets, including cryptocurrency, at a later time, allowing for a public commenting period. No date was provided.
“The announcement does not affect the rules in effect before the Infrastructure Investment and Jobs Act for cash received in the course of a trade or business, which must be reported on Form 8300, Report of Cash Payments over $10,000 Received in a Trade or Business, within 15 days of receiving the cash,” the announcement said.
“As with cash transactions, businesses that receive cryptoassets with a fair market value of more than $10,000 would also be reported on,” the Treasury Department said in a proposal in 2021 before the measure was passed.
The rule has faced significant criticism from cryptocurrency organizations and companies.
It was challenged in court, namely by industry organization CoinCenter, which argued that those rules started to apply to cryptocurrency transactions on Jan. 1, 2024—or about two weeks before the latest IRS notice. The group said that those who fail to file a report within 15 days of a transaction might face felony charges.
“More to the point, where do you even send your report? The law says that one must make a report ‘in such form as the Secretary [of the Treasury] may prescribe,’” it said. The Treasury also requires cash to be reported under Form 8300, but, according to CoinCenter, the Treasury or IRS have not “explained how cryptocurrency, which is now a form of ‘cash’ under the law, should be reported on this form.
“It’s unclear what will happen. Will the IRS issue guidance or an updated form and submission process anytime soon? If not, people who receive qualifying amounts will find themselves in an odd position and will no doubt try to comply by notifying the IRS in any number of ways just to demonstrate good will,” the group warned.