TL; DR
-
Last week we mentioned that a new US tax law requires the IRS to know the name and social security number of anyone who sends $10,000 (or more) of “business-related crypto” to your wallet.
-
The problem is that the vast majority of crypto transactions are anonymous, making this provision virtually impossible to comply with (at least currently)…
-
Good news: The law will not be enforced at this time, and when the time comes, the law will likely only apply to transactions made “in the course of an individual’s employment.”
Full story
Remember last week we had a nice chat about US tax laws?
In short, as of January 1, ’24, the IRS now wants to know:
-
Name
-
Citizen service number
-
Favorite color
From anyone who sends $10,000 (or more) of “business-related crypto” to your wallet.
…and if you don’t report it within 15 days – BAM!
(Potential) crime.
The problem is that the vast majority of crypto transactions are anonymous, making this provision nearly impossible to comply with (at least currently). So the big question became:
Are we all going to jail?
Well, we’re not! (Hurrah!)…for now (Oh?)
The IRS made it clear that the measure is not currently being enforced and will not be enforced for some time.
Good news: when the time comes, the law will likely apply only to transactions conducted “in the course of an individual’s employment.”
Even better news: that means it shouldn’t apply to flipping NFTs or meme coins for day trading.
That said, there are still some questions that need to be answered, such as:
If your primary income comes from staking Ethereum, how do you report it?
Because the last we heard is that Ethereum does not have a social security number.
(Or a favorite color).