New Crypto Tax Law That’s ‘Impossible To Comply With’ Now in Effect, Says Coin Center – Here’s What It Is

A leading cryptocurrency advocacy group has expressed concern over new tax regulations that it believes are virtually impossible to comply with. Coin Center has issued a press release stating that The Infrastructure Investment and Jobs Act, passed in 2021, came into effect on January 1st. Under this law, anyone receiving more than $10,000 in cryptocurrency assets must report the transaction to the Internal Revenue Service (IRS). Coin Center argues that the law is not only unconstitutional and ambiguous, but also presents practical challenges in its enforcement. It questions how miners or validators, for example, should report block rewards exceeding $10,000, and who should be reported in the case of decentralized crypto-to-crypto exchanges. Additionally, the law categorizes crypto assets as cash, necessitating the reporting of transactions over $10,000 through Form 8300 to both the IRS and the Financial Crimes Enforcement Network (FinCEN). However, Coin Center highlights that FinCEN lacks the authority to collect reports on cryptocurrency transactions and that it remains uncertain how crypto assets should be documented on the form.