As of January 1, 2024, a new cryptocurrency tax reporting requirement under the U.S. Infrastructure Investment and Jobs Act has come into force. The law mandates that any individual or business receiving $10,000 or more in digital assets in the course of their trade or business must file a report with the Internal Revenue Service (IRS) within 15 days of the transaction. Crypto policy advocacy group Coin Center warns that non-compliance could lead to felony charges.
Key Requirements and Potential Penalties
According to Jerry Brito, executive director of Coin Center, the report must include the sender's name, address, Social Security number (SSN), the amount received, the date, and the nature of the transaction. The obligation applies to both individuals and businesses—including miners, day traders, NFT artists, and others who receive crypto as part of their trade or business, even if they are not incorporated.
“If you don’t file a report within 15 days of receiving the transaction, you could be found guilty of a felony offense,” Brito emphasized. However, he noted that the law is currently being challenged in court. Coin Center filed a lawsuit against the Treasury Department in June 2022, arguing the provision is unconstitutional. The case remains pending, meaning compliance is still required in the interim.
Guidance Gap Creates Compliance Nightmare
Despite the law being in effect, the Treasury Department and IRS have not issued formal guidance or updated reporting forms. Brito highlighted several critical questions that remain unanswered:
· If a miner or validator receives block rewards exceeding $10,000, whose name, address, and SSN should be reported?
· For a decentralized exchange transaction where one receives more than $10,000 in crypto, how does one identify the counterparty?
· If someone makes an anonymous donation (e.g., Bitcoin or Ether) to a public address, how should the recipient report the donor?
· The law treats cryptocurrency as “cash,” requiring the use of Form 8300—currently submitted to FinCEN and the IRS. However, FinCEN has no authority over cryptocurrency transactions, making the form’s use legally ambiguous.
“The Treasury has not answered these questions, and the IRS has not provided any guidance. There is no specific form tailored for crypto reporting,” Brito said. “This leaves taxpayers in a difficult position—they must comply, but it’s unclear how to do so correctly.”
Wide Impact on Crypto Participants
The new rule is not limited to large businesses. Freelancers receiving crypto payments, individual miners, high-frequency traders, and anyone engaged in regular crypto dealings above the threshold are all affected. Without clear instructions, experts urge caution and close monitoring of regulatory updates.
Coin Center reiterates that while the lawsuit continues, the law is currently enforceable. Failure to report may result in criminal prosecution. The industry is calling on the Treasury Department to release clear, practical guidelines as soon as possible to reduce compliance risks and legal uncertainty.