U.S. Treasury delays crypto tax reporting laws; it cannot define what a “broker” is

The United States Treasury Department has decided to postpone the implementation of a key set of crypto tax reporting regulations until further notice. According to the Infrastructure Investment and Jobs Act, which was passed in November 2021, the rules were meant to take effect in the 2023 tax filing year.

The new rule mandates that the Internal Revenue Service (IRS) create a standard definition of what constitutes a “cryptocurrency broker,” and any company that satisfies this criterion must produce a Form 1099-B to each client outlining their gains and losses from trades. These businesses must also give the IRS the same data so that it is aware of the trading-related income of their clients.

The infrastructure bill was voted into law more than a year ago, but the IRS has yet to define a “crypto broker” or produce standard forms for these businesses to use when filing the reports.

The Treasury Department stated in a Dec. 23 statement that it plans to draft such rules soon. It further explains that the treasury department and the IRS intend to implement section 80603 of the Infrastructure Act by publishing regulations specifically addressing the application of sections 6045 and 6045A to digital assets and providing forms and instructions for broker reporting. Final regulations will be published after carefully considering all public comments submitted and all testimony at the public hearing.

The department also states that brokers will be exempted from the new crypto tax requirements, stating that until those new final regulations under sections 6045 and 6045A are issued, brokers will not be required to report or furnish additional information concerning dispositions of digital assets under section 6045, or issue additional statements under section 6045A, or file any returns with the IRS on transfers of digital assets under section 6045A(d).

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