US delays crypto tax reporting rules as it still can’t define what a ‘broker’ is

A key set of crypto tax reporting rules are delayed until further notice under a decision by the US Treasury Department. The rules were supposed to come into effect in the 2023 tax year, under the Infrastructure Investment and Jobs Act passed in November 2021.

The new law requires that the Internal Revenue Service (IRS) is developing a standard definition of what a “cryptocurrency broker” is, and any business that falls under this definition is required to issue a Form 1099-B to each customer detailing their profits and its trading losses. It also requires these businesses to provide this same information to the IRS so that it is aware of customers’ business earnings.

However, more than 12 months have passed since the infrastructure bill took effect, but the IRS still hasn’t released a definition of what a “crypto broker” is or created any forms. standard that these companies can use to compile the reports.

In a December 23 statement, the Treasury Department said it intended to develop such rules soon, as it Explain:

“The Department of the Treasury (Department of the Treasury) and the IRS intend to implement Section 80603 of the Infrastructure Act by issuing regulations specifically addressing the application of Sections 6045 and 6045A to assets and providing reporting forms and instructions to brokers. […] After careful consideration of all public comments received and all testimony during the public hearing, the final settlement will be published.

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In the meantime, the department indicates that brokers will not be required to comply with the new crypto tax provisions, stating:

“Brokers will not be required to report or provide additional information regarding dispositions of digital assets under Section 6045, or issue additional reports under Section 6045A, or file reports with the IRS on digital asset transfers under section 6045A(d) until these new final regulations under sections 6045 and 6045A are issued.

However, taxpayers (customers) will still be required to comply with crypto tax provisions.

Crypto tax provisions have been controversial within the blockchain industry since they were first proposed. Critics have argued that the broad definition of “broker” under the law could be used to attack bitcoin minerswho is unlikely to be able to comply with the reporting provisions.