Understand the implications of for brokers and digital assets to report to Internal Revenue Service (IRS) that have been mandated by the $1.2 trillion Infrastructure and Jobs Act of 2021. Crypto Reporting in IRC sections 6045, 6045A, and 6050I.
The passage of the $1.2 trillion infrastructure bill by the House of Representatives on November 5, 2021, marks a significant milestone in the legislative process, as the bill now moves forward to President Joe Biden for final approval and signing into law. The Infrastructure and Jobs Act, encompassed within this comprehensive legislation, not only addresses critical infrastructure investment but also introduces important provisions pertaining to information reporting requirements for brokers and digital assets.
One of the key areas impacted by the Infrastructure and Jobs Act is the broker reporting rules outlined in Internal Revenue Code (IRC) sections 6045, 6045A, and 6050I, along with their corresponding regulations. These rules govern the reporting obligations of brokers with respect to various financial transactions, including the purchase, sale, and exchange of securities and other financial instruments.
The inclusion of provisions related to digital assets underscores the evolving landscape of finance and taxation in the digital age. With the proliferation of cryptocurrencies and other digital assets, policymakers recognize the need for regulatory clarity and transparency in order to ensure compliance with tax laws and regulations.
For a list of changes, please see our prior post.
So, what is next? Once President Biden signs the Infrastructure Bill into law, the IRS and Treasury will have to develop regulations and other guidance for taxpayers required to submit the impacted reports. The IRS will have to provide additional guidance for new filing requirements on Form 1099-B and 8300.