The US Treasury Department has announced a delay to the publication of key crypto tax regulations until further notice. These regulations were expected to take effect in the 2023 fiscal year, following the pass of the Infrastructure Investment and Jobs Act in November 2021.
The new law requires the IRS to develop a standard definition of what constitutes a “cryptocurrency broker” and for those businesses who meet this criteria to issue a statement, Form 1099-B. This statement would provide each customer with a detailed report of their profits and losses from trading. It would also require these businesses to provide the IRS with the same information to track customers’ incomes from trading.
However, over 12 years since the infrastructure bill was passed, the IRS has yet to release a definition of a “cryptocurrency broker” and standard forms for these companies have yet to be created. According to the December 23 statement from the Treasury Department, the department is working to issue such rules soon.
“The Treasury Department and the IRS intend to implement section 80603 of the Infrastructure Act by publishing regulations that specifically address the application of sections 6045 and 6045A to digital assets and provide forms and instructions for broker reports. […] After careful consideration of all public comments received and all testimony at the public hearing, the final regulations will be published.”
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The Treasury Department has also announced that brokers will not be required to comply with the new crypto tax provisions until the regulations are issued. The statement reads:
Brokers will not be required to report or provide additional information regarding digital asset provisions under section 6045, or issue additional returns under section 6045A, or file returns with the IRS regarding digital asset transfers under section 6045A( d) until those new final regulations are issued under sections 6045 and 6045A.”
Crypto tax provisions are still applicable to customers and taxpayers, however.
The crypto tax provisions have been a source of controversy since their introduction. Critics have argued that the broad definitions of “broker” under the law could be used to target Bitcoin miners, who would likely be unable to comply with the reporting requirements.