19 November 2021 | News

New Crypto Reporting Provisions under US Infrastructure Law

On 15 November 2021, President Biden signed into law the Infrastructure Investment and Jobs Act (“IIJA”). While the IIJA is primarily transportation infrastructure legislation, an important cryptocurrency reporting provision relevant to cryptocurrency exchanges and persons transacting in digital assets is included.

Effective in 2024, the IIJA defines “digital asset” service providers as “brokers” following the existing broker information reporting regime under United States Internal Revenue Code Section 6045. Additionally, effective in 2024, the law defines cryptocurrency as cash for purposes of the existing Section 6050I requirement to report cash payments over USD 10,000 received in a trade or business. The existing prohibition on structuring cash payments to evade the cash reporting threshold of over USD 10,000 will also apply to crypto transactions.

Crypto Broker Reporting

Brokers are responsible for reporting tax information, including names and addresses of their customers, to the United States Internal Revenue Service (“IRS”). Under the IIJA, a broker includes “any person who (for consideration) is responsible for regularly providing any service effectuating transfers of digital assets on behalf of another person.” Under this provision, “’digital asset’ means any digital representation of value which is recorded on a cryptographically secured distributed ledger or any similar technology as specified by [Treasury].”

Brokers will be required to undertake the same reporting for digital assets as has applied for other securities, such as stocks and bonds, including Form 1099-B (or similar) reporting of sales and basis information, beginning with transactions occurring in the 2023 calendar year.[1] US customers who do not supply an IRS Form W-9 to a broker are subject to backup withholding at the rate of 24% on gross proceeds. (Non-US customers of US brokers have special income and estate tax considerations in holding digital assets with a US-based custodian, potentially including a variety of asset holding structures.) Non-US cryptocurrency brokers subject to a Qualified Intermediary Agreement should expect Treasury to incorporate this expanded broker definition into the Qualified Intermediary program.

Additionally, a new reporting requirement is enacted to apply to transfers of digital assets from brokers to non-brokers. Consequently, a transfer of digital assets from a cryptocurrency exchange to a customer’s wallet is reportable by the broker.


[1] Under a “rule of construction” provision in the IIJA, an inference should not be made based on these rules as to whether a party is nevertheless a broker, or a digital asset is a “specified security”, prior to the effective date of these rules.


Crypto Peer-to-Peer Payment Reporting

The IIJA extends the existing requirement to report cash payments over USD 10,000 received in a trade or business to digital assets. (Related or multiple transactions may together reach over USD 10,000 and trigger a reporting requirement.) A willful violation of this requirement is a felony under US law.

Crypto payments made through a financial institution are exempt from this “cash” reporting requirement, much as payments in fiat currency made via a wire transfer or check drawn on a bank account are exempt from reporting by the account holder. (The financial institution itself is responsible for reporting transactions over USD 10,000 under separate provisions.)

Note that there is no bright line test for determining whether one is engaged in a trade or business.

The existing cash reporting requirement is made by submitting an IRS Form 8300 within fifteen days of the transaction, where the name, address, taxpayer identification number, and other data regarding the payor is submitted by the payee. Payees are to provide a statement to notify payors that a Form 8300 report was made following the close of the calendar year. Records of the reporting are required to be kept for five years.

Name and address verification is required for payments from persons outside the United States, which may be met by inspecting an ID issued by a foreign government.

Cash payments made and arranged entirely outside the United States are exempt from Form 8300 reporting. Due to the decentralized nature of digital assets, it is not clear whether the locations of the payor and payee are determinative or whether the location of the transaction validators or the network consensus (i.e., everywhere, including within the United States) or other factors are relevant. The government is likely to provide some clarification on this point before the 2024 effective start date of the new rules.

A payee may also report a payment of USD 10,000 or less on an optional basis if the payee deems the payment suspicious. There is no requirement to notify a payor of a Form 8300 filed if this optional reporting is made.

Further, note that the Treasury may provide Form 8300 data to foreign governments upon request, if requested for non-tax reasons, such as for a foreign anti-money laundering investigation.

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