Businesses do not have to report certain transactions involving digital assets until the Treasury Department and the Internal Revenue Service (IRS) issue regulations.
The agencies said this in a Tuesday (Jan. 16) press release and issued an announcement that provides transitional guidance as they implement new provisions.
The Infrastructure Investment and Jobs Act revised the rules that require businesses to report receiving cash of more than $10,000 by considering digital assets to be cash, according to the release. It also requires Treasury and the IRS to issue regulations before that provision goes into effect.
“Treasury and the IRS intend to issue proposed regulations to provide additional information and procedures for reporting the receipt of digital assets, giving the public an opportunity to comment both in writing and, if requested, at a public hearing,” the press release said.
In an earlier development having to do with another issue around digital assets, Treasury and the IRS said in August that they have proposed regulations that aim to “close the tax gap” in the sale and exchange of digital assets.
These regulations, which are also part of the Biden Administration’s efforts to implement the Infrastructure Investment and Jobs Act, seek to provide information on the amount owed by taxpayers and crack down on tax cheats.
The proposed regulations aim to subject brokers of digital assets to the same information reporting rules as brokers for securities and other financial instruments.
“This is part of a broader effort at Treasury to close the tax gap, address the tax evasion risks posed by digital assets and help ensure that everyone plays by the same set of rules,” the agency said at the time.
Accepting cryptocurrency payments is a murky issue from a tax perspective, as virtually every rule about taxing cryptocurrencies remains unwritten, PYMNTS reported in March 2022.
PYMNTS Intelligence has found that while shopping with cryptocurrency remains a novel experience for most consumers, 35% of tech-driven consumers prefer merchants that take crypto. Twenty-six percent of these tech-driven consumers said they would go so far as to switch merchants to shop where crypto is accepted, according to “Shopping With Cryptocurrency,” a PYMNTS and BitPay collaboration.
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