New Tax Law 60501 on Infrastructure Projects Takes Effect, Cryptocurrency Policy Organization Coin Center: Regulations Unclear, Users Struggle to Comply

Coin Center, a cryptocurrency and blockchain think tank, revealed that the 60501 tax law, which requires individuals who receive more than $10,000 worth of cryptocurrency in trades or businesses to report the details to the Internal Revenue Service (IRS), has now come into effect as part of the US Infrastructure Bill. The law, included in the Infrastructure Investment and Jobs Act (IIJA) signed by President Biden in November 2021, has been criticized by the crypto community for its tax provisions. It requires individuals who engage in cryptocurrency transactions or businesses exceeding $10,000 in value to report to the IRS. The reporting details include the names, addresses, social security numbers, transaction amounts, dates, and nature of the transactions. Failure to submit the report within 15 days of receiving the transaction may result in criminal charges. The law went into effect on January 1, 2024, and applies to all US citizens. Jerry Brito, the executive director of Coin Center, expressed concerns about the lack of clear guidelines and potential issues in complying with the reporting requirements. He raised questions about the applicability of the law in various scenarios, such as who should be named as the sender when miners or network validators receive block rewards exceeding $10,000 and whether receiving $10,000 through decentralized exchanges’ swap functionality requires reporting. Brito also highlighted the ambiguity surrounding the use of “Form 8300,” a form designed for reporting cash income, to report cryptocurrency income. He emphasized the need for clear rules and stated that Coin Center will continue to advocate for clarity through litigation with the Treasury Department. The 60501 tax law has drawn attention due to its inclusion of “brokers” in the tax obligations under the Infrastructure Bill, which would require exchanges and custodial wallets to provide user data for taxation purposes. However, the law does not clearly define “brokers,” causing confusion for miners or validation nodes who may fall within the regulatory scope and face difficulties in providing sender information. Nevertheless, the Treasury Department has confirmed that miners, wallet providers, and DeFi engineers will not be considered brokers under the 60501 tax law, relieving them from the KYC pressure associated with the law. In addition to the 60501 tax law, the IRS is also planning to introduce new tax regulations for the cryptocurrency industry in 2026, which will require tracking user profits and assisting with tax submissions for crypto wallets, payment processors, centralized exchanges (CEX), and decentralized exchanges (DEX), posing a significant threat to the decentralized ecosystem.