When Congress passed the Infrastructure Investment and Jobs Act, lawmakers included a measure to require stricter reporting of capital gains on crypto. Since 2014, the IRS has made clear that cryptocurrencies are “property,” and therefore subject to federal taxes. But, due in no small part to the cryptographic nature of these assets, crypto investors have been notorious for dodging their tax bills. The IRS believes that unreported taxes on crypto amount to tens of billions in lost revenue.
Ostensibly to help offset the costs of the massive $1.2 trillion infrastructure package, Congress decided to subject digital assets like crypto to further reporting requirements in an attempt to collect this revenue. To do this, the law defines “any person who...is responsible for regularly providing any service effectuating transfers of digital assets” as a “broker” under the tax code. Federal law requires brokers to report the name, address, and gross proceeds of any transactions they facilitate to the IRS.
Read Full Article »
