According to Jerry Brito, Coin Center’s executive director, the guidelines for reporting crypto taxes in 2024 are causing confusion and uncertainty.
The infrastructure bill, now law under President Biden, includes provisions that mandate reporting digital asset transactions over $10,000 to the IRS. However, there’s contention around these rules, especially regarding the burden on brokers to collect and submit such detailed information.
These regulations require crypto brokers to send personal information about transactions, including names, addresses, and social security numbers, to the IRS within a tight 15-day window. The aim is to narrow the U.S. tax gap, with the original deadline set for companies to start reporting in 2024.
Brito highlights the challenge many users will face in complying without clear guidance from the IRS. He’s concerned that although people will try to follow the law, the ambiguity might unintentionally lead to legal issues, potentially even felonies.
He raises valid questions about reporting for miners or validators receiving rewards exceeding $10,000, or individuals engaging in decentralized crypto exchanges. The lack of clarity on measuring the value of different cryptocurrencies further complicates matters.
Brito specifically points out the complexity of reporting anonymous donations made via Bitcoin or Ether to public addresses, questioning who can be listed as the sender in such cases.
Coin Center had proposed exemptions for smaller crypto transactions and urged the IRS not to impose stringent requirements on secondary parties involved in these transactions back in August. However, the expanded requirements under the infrastructure law could pose significant challenges for taxpayers in 2024, especially with unclear guidelines.
