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On November 15, 2021, the “Infrastructure Investment and Employment Act” (Iija), which became the law, included two clauses that affect the US taxpayer reports involving digital assets (including cryptocurrencies).The first item stipulates that the information report requirements are expanded, including the transfer of digital assets.The second item stipulates that digital assets to the current rules are required to report cash payment with more than 10,000 US dollars.Both of these regulations apply to the declaration form that requires submitted after December 31, 2023.The law officially took effect on January 1, 2024.
1. The main content of the New Capital Law
1.1 two provisions
1.1.1 Form 1099-B
Article 80603 of Iija revised the “Domestic Revenue Code (IRC)” § 6045 (C) (1), that is, the transfer of certain digital assets must be reported on Form 1099-B.The scope of this report is applicable to anyone who provides any services to others with a regular service for digital asset transfer on behalf of others.Earlier, cryptocurrency exchanges, miners and software developers (for example, creators of software and hardware wallets) do not need to issue Table 1099-B.
It is worth noting that before Iija passed, an official of the US Treasury officials said informally that the Ministry of Finance will not apply for this report for non -brokers, such as miners and certain software and hardware developers.However, Iija’s revision clause shows that even if it is a non-agent, if it is included in the scope of “serving any service to other people to provide any digital asset transfer services”, it will also be asked to provide customers and the IRS (IRS) 1099-B.sheet.therefore,Anyone who provides digital asset transfer services on a regular basis should comply with IIJA’s 1099-B form report requirementsEssenceIn the final analysis, the main role of this form is to combat money laundering.
At the same time, the formulation of the formula 1099-B report on the formulation also faces challenges, because the design purpose of cryptocurrencies is to be sent across exchanges and wallets across exchanges and wallets without intervention.therefore,Exchange, miners and software developers may not be able to access all information required to report on Table 1099-BSuch as name, social security number, address, acquisition date and cost foundation.Therefore, the newly defined broker who complies with IRC6045 (C) (1) may be forced to submit Form 1099-B, and the cost basis is displayed as zero, which may cause the revenue reported to the State Taxation Bureau to be exaggerated.Taxpayers must retain the detailed records of their cryptocurrency transactions to accurately report taxable income or other income.
1.1.2 Form 8300
Article 6050i IRC requires individuals to submit 8,300 forms in a behavior of receiving more than 10,000 US dollars cash in one transaction or two or above transactions. The form needs to be declared to the Crime Investigation Division of the U.S. IRS within 15 days.Article 80603 Iija revised the No. 6050i section (D) of IRC, expanding the requirements of the form 8300 report, including digital asset transactions.For example, according to new regulations, if individuals purchase a single non -replacement of tokens (NFT) from the artist with a $ 15,000 Bitcoin, the seller will be required to submit 8300 forms within 15 days to report the situation of cryptocurrencies.In order to accurately fill in the form 8300, the seller will need to collect information, including the name of the buyer, the taxpayer recognition number, the date of birth and address.As far as the limit of $ 10,000 is concerned, all transactions that occur between the two parties with a transaction of more than $ 10,000 will be considered as related transactions within 24 hours.
Failure to comply with the rules specified in Article 6050i (D) will face the risk of major punishment.The negligence that has not been submitted to the 8300 table may cause a fine of $ 280 per time, and the maximum of each calendar must not exceed 3,302,000 US dollars in each calendar.Do not disclose the transactions covered by Article 6050i (D) may lead to civil and criminal punishment and felony prosecution.The civil punishment that deliberately ignored the form 8300 reported that the cash value received in the transaction was equal to the cash value received in the transaction.Intentionally ignoring the report request for individuals and companies to punish individuals and companies at $ 25,000 or $ 100,000, and/or five -year imprisonment.For reports that lead to or try to cause the industry or enterprises to fail to submit the prescribed regulations, resulting in a regulation report that contains major omissions or error factual statements, or try to build a transaction in some way to avoid the report requirements of Article 6050i (d) report requirementsIndividuals and companies will also be punished.These illegal acts may be punished by a person with a maximum maximum of $ 100,000, a company’s maximum of $ 500,000, and a three -year imprisonment of criminal punishment.
1.2 The scope of the influence of the new and new encryption tax law
The new rules equate the rules of digital assets to the report rules of “cash”. The two parties of encrypted transactions need to provide each other’s information with each other.This is an unusual law. Although it is part of the tax law, it is not a real tax rule.First of all, unlike other IRS information report requirements, the transaction report must be submitted within 15 days, and the behavior of violating this regulation will be a felony. Second, it is not limited to the “broker” or an encryption exchange.Including individuals.The only thing that is not restricted is banks and financial institutions.
1.3 Report requirements for the New Cryptation Law
According to new laws, anyone engaged in trade or business if he receives $ 10,000 or more cryptocurrencies, he must report the transaction to IRS.The content of the report must include comprehensive details, such as the name, address and social security number, transaction amount, and the date and nature of the transaction.And individuals who fail to submit the necessary reports within 15 days after receiving such transactions may face felony charges.
2. What are the obligation to report the new regulations?
2.1 “Broker”
All cryptocurrency exchanges (Coinbase, Robinhood, etc.) are now regarded as “agents” like traditional agents.Specifically, the bill stipulates that the “agent” is “anyone who is responsible for regularly providing services that regularly provide digital asset transfer on behalf of others”, but there is no clear scope, and developers, wallet providers and miners may also be classified.”Broker”.
2.2 Taxation of “Digital Assets” under the new regulations
“Digital Assets” is defined as “distributed ledger or any number representation recorded in password protection”.证 Digital assets will be treated like securities’ capital gains/losses.In the past, digital assets were classified as property, so they levied taxes based on benefits or losses.The tax treatment of digital assets is basically the same as before: it must be taxed by capital.In other words, the new rules only affect the declaration, not tax benefits.
However, securities also face the supervision of the US Securities and Exchange Commission (SEC), and the legislation does not mention the SEC.SEC will allow traditional securities companies such as stocks to submit quarterly reports to provide a prospectus in detail in detail.There is no clear regulation for whether cryptocurrencies should submit similar files to SEC.
2.3 The information report obligation of the encryption exchange
The encrypted exchange must provide information from the National Taxation Bureau.The New Tax Law stipulates the following information to the State Taxation Bureau: (1) the name, address and telephone number of each customer; (2) the total income of any sales of digital assets; (3)Short -term (holding one year or less) is still long -term (holding more than a year).
2.4 Legal consequences that do not report
If the encrypted exchange fails to report such information in accordance with regulations, serious punishment will be received.1099-B: If it is not declared in accordance with the regulations, a fine of $ 250 will be paid to each customer, up to 3 million US dollars (according to the US Code 26th, Section 6722, “the correct report of the payer” will not be provided. “To.With 8300 forms, more than 10,000 US dollars, everyone needs to report. Because of negligence, the 8300 form is not submitted, and the transaction is deliberately not disclosed. It deliberately ignores the report of the form 8300. It is intentional to ignore the report requirements.Prior to the implementation of the law, the cryptocurrency advocating organization Coincente filed a lawsuit and questioned its constitution.The central argument proposed by Coin Center is that the new law is vague, bringing major compliance challenges to encrypted users and enterprises.They believe that, in view of the huge diversity of participants in the field of cryptocurrencies (from temporary traders to miners and verifications), the law lacks necessary clarity.In addition, the IRS did not provide sufficient guidance for it.As of now, the results of Coin Center’s lawsuits are still uncertain, and it remains to be observed whether it can be wins.
3. The influence and potential consequences of the New Cryptation Law
The main goal of the new tax law that starts to implement this time is to collect information about encrypted asset users.At the same time, it also plays an important role in anti -crime. The government can use the received reports to investigate suspicious activities.This law marks a significant expansion of the US State Taxation Administration’s monitoring of cryptocurrency trading capabilities because the agency has been worried about the possibility of cryptocurrencies for tax evasion for a long time.Through this law enforcement, the U.S. Taxation Administration now has a strong tool for cracking down on cryptocurrencies.
However, the implementation of this law may challenge the adoption and innovation of the cryptocurrency field.The threshold for $ 10,000 may prevent many individuals and entities from using Bitcoin, USDT or Ethereum because they know that each transaction must be reported to IRS.This concern may hinder the growth and development of the cryptocurrency industry.
At the same time, the implementation of the law has caused different reactions in the encrypted community.On the one hand, it has strengthened the regulatory framework and may solve the problem of tax evasion.On the other hand, due to the report requirements, it may prevent some users from participating in the cryptocurrency market, which may hinder the growth and innovation of the cryptocurrency industry.Therefore, for the popularity of rapidly growing virtual currencies, it is necessary to consider changing the impact and reporting obligations of the federal income tax.The tax impact of virtual currencies is very complicated, and transactions may lead to unexpected taxation consequences.
Reference
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[2] Tencent. (2021). Not reporting is a felony!What impact will the infrastructure bill bring in the infrastructure bill?
[3] Zhihu. (2021). How can the signing of the US Infrastructure Act affect the blockchain industry?
[4] bdousa. (2022) .infrastructionInvestment and Jobs Act Contains New Cryptocurrency Requirements
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